By John Healy of Healy Insurances
The cost of motor insurance in Ireland is a well-documented topic over the past number of years. Have the increases plateaued and are reductions on the horizon? Firstly, we need to know how we got here.
The average car insurance premium in 2013 was €435. Now compare this to 2019 when it hit an average of €706.
There are a myriad of reasons for the rate increases including higher claims costs. In 2014 the limit for personal injury awards at circuit court level was increased from €38,000 to €60,000. This level of claims inflation was felt across the insurance market and was immediate. This increase did not grab national headlines and was hardly commented on outside the insurance industry at the time.
In 2015 the average circuit court award increased by 21.2% following a 13.5% increase in 2014. The upturn in the economy at this juncture led to increased traffic and consequently higher levels of accidents and claims. The average whiplash claim in Ireland stood at €15,000 compared to €5,000 in the United Kingdom.
We should recall that the insurance industry witnessed a number of insurer failures in the past number of years including Setanta, Enterprise and of course the collapse of Quinn Insurance for which consumers are still paying a 2% levy every year. Some of these failures no doubt resulted from unsustainable pricing when the claims environment was getting considerably more difficult. The EU enacted Solvency II legislation in 2016, which required insurers to hold increased capital levels to protect against the risk of insolvency. It is also likely that it hastened the withdrawal of smaller niche insurers from the Irish market.
Insurance has been a hot potato for Government for many years. In late 2019 the Government enacted legislation to increase the timeframe for issue of renewal notices from 15 to 20 days. There was also a multitude of extra information to be included. Any consumer who has purchased motor insurance will have noticed the massive increase in the documentation over the past year. Does this lead to lower premiums? Even an EU former chair of a regulatory institution, Gabriel Bernardino, has recently acknowledged the problem in saying “too much information kills information” and that consumers are not reading documentation received.
The insurance market experiences cycles of expansion and contraction. An expansion is referred to as a soft market and will result in reduced premiums, more competition, and increased capacity from insurers to write business and a scramble for market share, sometimes below profitable levels. A contraction is called a hard market and typically results in higher premiums, less completion and capacity to write business, and withdrawal of insurers from sectors. While the profits of motor insurers can be in the millions it is perhaps more reflective to note that their combined operating ratio (underwriting margin in other words) is often at 5% or lower.
Is Ireland entering a soft market for motor insurance premiums?
According to Insurance Ireland, a representative body, there have been reductions of 9% in 2019 with a further 6.5% in 2020. According to the Central Bank, the average premium at the end of 2020 was €653. For comparison purposes, the average comprehensive car insurance in the UK was €882 in the last quarter of 2020 and in France, the average cost is between €700 and €900 depending on regions.
The new personal injury guidelines will have a positive impact on premiums but this will take time to wash through the legal system. COVID-19 has certainly meant much reduced traffic on the roads and this should feed into lower claims and thus lower costs.
At Healy Insurances, we surveyed over 120 of our customers over the month of May and found that the average year on year car insurance reduction was 15% from 2020 to 2021.
The current reductions on rates are likely due to the benign claims environment over the past year rather than the changes to the personal injury guidelines.
The question is; will reductions continue as the economy continues to reopen and emerge from the pandemic?
Kerry house prices accelerate – IPAV’s residential property price barometer
The Institute of Professional Auctioneers and Valuers (IPAV) latest Residential Property Price Barometer shows an acceleration in house price increases over the previous six months including in Kerry. Overall IPAV’s study has found double digit growth for 3-bedroom homes in Waterford and Limerick. And close behind are Tipperary, Meath, Louth and Cavan with nine plus […]
The Institute of Professional Auctioneers and Valuers (IPAV) latest Residential Property Price Barometer shows an acceleration in house price increases over the previous six months including in Kerry.
Overall IPAV’s study has found double digit growth for 3-bedroom homes in Waterford and Limerick. And close behind are Tipperary, Meath, Louth and Cavan with nine plus percent growth, followed in the eight plus percent range by County Dublin, Carlow, Dublin 15, Dublin 7 and Kildare.
In Kerry three-bedroom homes increased by 4.55pc; 4-bedrooms by 9.80pc and two-bedroom apartments by 3.70pc.
Some of the area specific increases are accounted for by new blended working opportunities where people don’t have to operate from formal office settings on a full-time basis, according to IPAV’s Chief Executive Pat Davitt.
“While that is an influential factor, the main driver of increasing prices is the lack of supply of homes to meet current and pent-up demand. And that is why predictions by economists and others of house price drops during the pandemic have not materialised, forecasts IPAV called into question at the time,” he said.
Mr Davitt said his organisation welcomes the Government’s new ‘Housing for All’ plan with a commitment to invest €4 billion per year to build 300,000 homes over the next nine years.
“While the nuts and bolts of how precisely the plan is going to achieve that target remains to be seen, it is in the interest of society as a whole that the plan works because continuing house price increases at the level we are currently seeing would not be sustainable over the longer term but will not abate either until more stock comes on stream to meet supply.
He said the extension of the Government’s Rebuilding Ireland Home Loan scheme from Local Authorities was welcome but it needs to be extended further to enable all purchasers to take advantage of the 4.5 times income under that scheme, not just first-time buyers.
The IPAV Residential Property Price Barometer charts house prices achieved by auctioneers, as opposed to asking prices. Mr Davitt said while that difference is always relevant it is particularly so now given the intensity of activity where, it would appear, asking and achieved prices are diverging, often to a considerable degree.
He thanked members of IPAV for their contribution to the study which he said provides “real market evidence as opposed to speculation on prices”.
Work at height regulations
Work at heights is work in any place, including a place at, above or below ground level, where a person could be injured if they fell. Access and egress to a place of work can also be work at height. The work at height regulations under the h Health and Safety acts place an onus […]
Work at heights is work in any place, including a place at, above or below ground level, where a person could be injured if they fell.
Access and egress to a place of work can also be work at height. The work at height regulations under the h
Health and Safety acts place an onus on employers to ensure that the work is properly planned and organised.
In advance of starting work, each situation should be assessed to determine the best method for obtaining access to the elevated position where the work needs to done.
These are the main factors you should take into consideration during this assessment:
* How long do you estimate the activity will take?
* How complex is the task?
* How many component parts need to be handled?
* How big and heavy are they?
* How high above ground level is the work be done?
* How much moving around horizontally will be necessary at an elevated position?
* What kind of access equipment is available?
* Is any additional equipment required for safe and economic working?
* Is it necessary to use a hydraulic platform?
* Are suitably trained and experienced personnel available?
* How much supervision will be required?
The work method must be discussed with all personnel and documented in a method statement.
The equipment to be considered could include:
* Hydraulic working platforms
* Mobile tower scaffolds
* Safety harnesses
All equipment should be inspected prior to use and used only in accordance with the standard operating procedures. Items such as hydraulic working platforms should only be used by trained personnel. All equipment should be included in the risk assessment documents and signed off by all users in the method statement.
The risk assessment should include a careful examination of what harm could be caused from working at height with a view to taking the effective steps to reduce the likelihood of this harm occurring, either through avoiding the activity or, where this is not reasonably practicable, by carrying it out in a safe manner using work equipment that is appropriate to the task and the level of risk.
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