Insurance companies are overcharging consumers the Consumer Association of Ireland (CAI) claimed this evening.
Michael Kilcoyne, chairman of CAI, said "any industry that makes a profit of 55 per cent has to be over-charging the consumer".
Earlier today the Financial Regulator released figures showing the industry pulled in €26.7 billion in premiums in 2004, a 22 per cent increase on last year. Motor insurers profits rose 55 per cent per cent on 2003 to €330 million.
Speaking on RTÉ radio this evening Mr Kilcoyne said that although the Government had introduced legislation to reduce the risk to insurers they did not do anything to force the companies to lower their premiums.
The Irish Insurance Federation claimed the strong results were good news for consumers because they have led to significant reductions in premiums, with motor insurance premiums returning to 1999 levels.
However, this was disputed by Mr Kilcoyne who claimed that while insurers costs have reduced, premiums have not been reduced accordingly.
"We know for example that the cost of claims have been substantially reduced, we know that the abolition of the access to courts by claim victims means that the amount of compensation they get has substantially reduced but their premiums haven't been reduced accordingly," Mr Kilcoyne said.
He added "the cost of insurance premiums for young males is still going through the roof".
Mr Kilcoyne said there was not enough companies in the insurance market place and there was no real competition.
"Many of them are branches of foreign multinationals so why would they send in other branches to compete against themselves," he said.
He advised customers to continue to shop around to find the best premium.