The Irish Insurance Federation (IIF) has said many insurance premiums have already fallen back to 1999 levels, and that significant further reductions, as predicted by a Oireachtas business and enterprise committee, may only occur if and when further planned legislation is enacted and works properly.
IIF chief executive Mr Michael Kemp said it remained to be seen if reductions of up to 22 per cent on car insurance in the last 12 months, along with cuts of up to 25 per cent and 46 per cent in the construction and hotels sector respectively, could be sustained.
"Some in the industry have questioned if the reductions are premature, and they have also questioned the size of them. There has been an increase in profits, but people run out then and cut premiums in an effort to win business only too find sometimes that they've cut too much."
Mr Kemp added that the IIF still believed average overall premium reductions of 30 per cent, as predicted by it in 2002, were possible. However, this would only be if the Government moved to implement measures aimed at tackling safety and the cost of claims, and only if these measures proved effective.
These measures include the success of the Personal Injuries Assessment Board and Civil Liability and Courts Bill. The IIF says the Driver Testing Standards Agency also needs to be implemented by the end of the year, and that further road safety measures needed to be implemented and enforced.
Mr Kemp said the federation supported many of the key recommendations of the interim report of the Oireachtas Joint Committee on Enterprise and Small Business, which was published yesterday. The report was drafted for the committee by Myles O'Reilly Consultants. It follows the consideration of written and oral submissions received over 18 months.
The chairman of committee, Mr Donie Cassidy TD, yesterday urged consumers to shop around for insurance.
He said motorists could expect significant reductions in their premiums over the next 12 months arising from the measures already in place, and from a return to profit by the insurance sector after more than three difficult years."If people with a no-claims record of between three to five years don't get a reduction of 20 to 25 per cent [on car insurance this year] we want to hear about it. The profits are there now because of all the moves that have been made by the committee and all the recommendations to the Government."
He reiterated his call on the Tánaiste, Ms Harney, to attract a major new insurance entrant to the market before she leaves her portfolio this year, saying increased competition was a way to drive down premiums.
ISME, the independent business organisation, welcomed the committee's demand that insurance premiums be reduced to 1999 levels. ISME chairman Mr Robert Berney said: "While there is evidence that insurance premiums have been falling over the last 12 months, the level of reduction is miserly in comparison to the exorbitant increases faced by small businesses over the last five years."
The Irish Hotels Federation said despite substantial improvements being made in the insurance environment over the past year, Irish premiums were still at least 50 per cent higher than those in Britain.
