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Governor Lane's comments must move car insurance debate onto the real facts – Doherty

25 May, 2016 - by Pearse Doherty TD

Sinn Féin’s Finance Spokesperson Pearse Doherty TD has welcomed the identification by Central Bank Governor of the lower yield investment environment as the reason for issues in the non-life insurance sector. He said it is now time to discuss the huge spikes in car insurance in light of this acknowledgement and to stop focusing on smaller side issues.

Deputy Doherty said:

“I am glad to see the Governor used the opportunity of this major insurance conference to explicitly spell out that the lower yield investment environment is causing difficulties for non-life insurers. This backs up private correspondence and Freedom of Information documents I have received from the Central Bank where this is spelt out and is specifically linked to the car insurance sector.

“I agree with Governor Lane’s assertion that ‘For non-life insurance, buoyant investment returns have subsidised the pricing of core insurance products. The response to a lower-yield environment should not be to chase returns by investing in ever riskier assets. Rather, the focus should be on earning an appropriate return from core underwriting activities’, but this must go hand in hand with a customer focussed approach. Young drivers, small businesses and indeed all drivers cannot be an afterthought between industry and regulator. Their interests and rights must be first and foremost.

“It is now time for policy makers and insurers to focus in on this fact when framing our response to the hugely unfair increases many drivers are experiencing.  There are other issues around legal costs and the nature of compensation that can be looked at but Governor Lane’s comments today should act to keep the public attention on the real issue.

“The lack of transparency and the lack of an independent right of scrutiny of massively inflated quotes for drivers across the spectrum are two areas where the State and State bodies can act in my view. As soon as the Oireachtas Finance Committee is formed, this issue will be my main focus and I hope to see progress as soon as possible.” 

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