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Are we getting the full picture on motor in insurance prices? - Pearse Doherty TD

22 February, 2019 - by Pearse Doherty TD


Sinn Féin Finance Spokesperson Pearse Doherty TD has called for a tightening up on the methods used to calculate motor insurance prices in official figures after it was confirmed to him in a parliamentary reply that the process by which the CSO gathers the data would leave it open to the industry to knowingly present certain figures that may not reflect the full picture. 

He said the robustness of the figures had to be in question given that a Freedom of Information request received by him also showed that the industry were also questioning the extent of the increase in recent years.

Deputy Doherty said:

“In a parliamentary reply the Taoiseach, under whose remit the CSO falls, confirmed that in gathering data on the price of motor insurance the CSO identify themselves to insurers as CSO staff. I feel that a more detailed and robust way of checking the actual prices is warranted given that the public continue to report large increases.

“There is no question as to the integrity and professionalism of the CSO staff and their interpretation of the figures given but I feel I must question whether the insurance industry, which is under investigation for price fixing at home and in Brussels, can be relied on to provide straight up data when approached officially by the State’s statistics body and asked its prices.

“The CSO approach is fine for the price of milk or nappies or most products but insurance is a notoriously difficult product to price which varies widely from person to person and place to place seemingly without rhyme or reason. Through an FOI request I have obtained documentation which shows an industry commissioned report actually disputes the CSO’s figures of a large increase arguing that in fact prices only increased by 22% between 2011 and 2016.

“At the very least, Ministers quoting these figures should be more circumspect given their ultimate source is the insurers themselves.

“The new insurance claims database will only increase data for the insurers themselves not for the general public. I, for one, am hesitant about heralding decreases given my interaction with the public who are not reporting such drops and I would prefer to see a more real world based exercise used to determine the price of motor insurance.”

For Written Answer on : 20/02/2019

Question Number(s): *80 Question Reference(s): 8521/19

Department: Taoiseach

Asked by: Pearse Doherty T.D.

______________________________________________

QUESTION

QUESTION NO:  *80

To ask the Taoiseach the way in which the CSO acquire data on the price of motor insurance; and if staff working for the office identify themselves as a representatives of the CSO when requesting such data from a company.

REPLY

Private motor insurance is one of the items measured in the monthly Consumer Price Index (CPI) published by the CSO. To compile the Motor Insurance sub-index of the CPI, the CSO collects premiums information from a sample of insurance companies. The sample covers approximately two thirds of the motor insurance premiums written in the market.

The insurance companies are requested to supply price quotations for defined customer profiles for both new and existing customers. This request is made monthly via email from a member of the CSO’s CPI team directly to a representative of each of the insurance companies in the sample. As with all companies contacted directly for information used in the compilation of the CPI, the CSO team members identify themselves.

The CSO keeps the profiles regularly updated so that they continue to be representative of the private motor insurance market. Each representative profile specifies characteristics such as the model and age of the car and the sex, age, location and occupation of the insured person. The measurement is designed to explicitly exclude any changes in premium that might occur due to changes in the characteristics of the policy (e.g. changes such as a new claim in the past year, older driver, additional penalty points etc.) as the aim of the CPI is to measure the change in prices each month for exactly the same goods and services.

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