Government asleep at the wheel as Insurance Companies make Supernormal Profits - Tóibín
Aontú Leader, Peadar Tóibín TD, has said that the huge profits made by the 17 domestic insurers in 2017 is a significant threat to the Irish society and the economy.
Speaking today Deputy Tóibín said:
“Companies are making supernormal profits on the basis of a non-functioning market. The clear losers are drivers, business owners, individuals and families. This dysfunction is also a significant economic competitive disadvantage. Fine Gael likes to see itself as the party of the Free Market yet housing and the insurance industry are just two of the many distorted markets they preside over.
“Profits at insurance firms have risen by 1,300%. Combined operating profits were €227 million in 2017. Companies are entitled to make profits but not at the expense of businesses and motorists that are struggling to meet ever increasing insurance costs.
“A huge contributing factor to spiralling insurance premiums is the compensation culture which is becoming more pervasive. The system in Ireland incentivises claimants and the legal industry but disincentives the insurance industry to challenge the claimants, even when they are fraudulent, with only 6% of cases going to court. Soft tissue injury claims are multiples of international comparators.
“There is also the matter of a possible cartel in the industry. Why wasn’t this tackled by the government? It has taken the European Commission to come in and investigate allegations of anti-competitive practices”.
“The government have spent that last two years achieving very little to reform the sector. Indeed, two Fine Gael TDs, Maria Bailey and Alan Farrell have recently been exposed engaging in physical exercise while submitting claims for being injured during the same time frame.
“Why has the government not set up an Insurance Fraud Squad? Why has this not been put in place? Why do we have a system where only a tiny minority of claims make it to court? Dozens of businesses are shutting down every month. People and families are seriously struggling. This inaction is serving no-one but the industry itself and select government representatives.”