The Government came under renewed pressure to make penalty points data available to insurance companies yesterday, when the chairman of the Competition Authority became the latest public figure to argue that giving the industry access to such information could stabilise premiums.
Allowing insurance firms access to penalty point details should be a key plank of any reforms combating perceived overcharging, said Dr John Fingleton. His recommendations echo calls by the Motor Insurance Advisory Board and the Irish Insurance Federation.
Complaints about motor insurance were the single largest category received by the authority last year, Mr Fingleton told the Oireachtas Joint Committee on Enterprise and Small Business. While the majority were not upheld, they pointed to high customer dissatisfaction with the industry.
Grievances included price increases, risk-assessment methods, tied selling (requiring customers to buy additional products for example) and lack of choice (only one player in a niche market).
Although concerns had been expressed about the rate of recent premium rises, insurance costs in the Republic had already been comparatively high. Reform should address the underlying cost of insurance rather than focus exclusively on short-term inflation, Dr Fingleton said.
With non-life insurance representing 3 per cent of gross domestic product (GDP), excessive pricing posed a severe threat to competitiveness and could have serious knock-on consequences for the health of the labour market, the committee heard.
"Effective competition puts downward pressure on prices and ensures that any reduction in costs gets passed on to buyers.
"It is vitally important that competition in the market works so that any benefits, arising from either domestic structural reform of the sector or reductions in international reinsurance rates, are passed on fully to consumers and business for the benefit of the whole economy," said Dr Fingleton.
The joint committee has written to relevant organisations seeking their comments on the Irish non-life insurance market. It is also seeking submissions from the public.
