Savings from fewer motor insurance claims as a result of reduced traffic during Covid-19 must be passed on to consumers – Pearse Doherty TD
Sinn Féin spokesperson on Finance Pearse Doherty TD has called on motor insurers to pass on savings they have made during the Covid-19 crisis to customers by providing reductions or rebates equivalent to at least 10 per cent of premiums for 2020.
The Donegal TD's call comes after the latest CSO figures show a 70 per cent drop in the volume of cars on the road over a six-week period from the end of March to May 9th.
Speaking today, Teachta Doherty said: “Since the Covid-19 outbreak and the containment measures introduced to contain its spread, it was inevitable that traffic levels would decline.
“Today’s CSO data shows a 70 per cent drop in cars on the road over a six-week period. Indeed, over a 13-week period, traffic volumes fell by 60% compared to 2019.
“This will mean a reduction in car traffic volumes of at least 15 per cent for 2020.
"A reduction in cars on the road mean a reduction in both the number and cost of claims.
“Based on recent figures published by the Central Bank, this reduction in traffic could cut underwriting costs for the motor insurance industry by at least 10 per cent this year.
“Before any rebates to customers, this could see insurers pocketing up to €200 million on the back of reduced traffic as a result of Covid-19.
“These savings must be passed on to consumers.
"Motor insurers should provide rebates or reductions equivalent to at least 10 per cent of premiums.
“To date, insurance companies have taken this crisis as an opportunity to bolster their profit margins, offering rebates or vouchers that bear no resemblance to the savings these companies will make as a result of the Covid-19 outbreak.
“Some insurance companies are offering vouchers of as little as €25 to customers paying over €1,000 this year for their motor insurance; less than three per cent the cost of their insurance.
“When insurance companies have been fleecing their customers for years with rip-off premiums, they cannot be allowed to profit from a pandemic.
“That approach must now change.
“Insurance Ireland should publish the total value of rebates that have been provided to motor insurance customers. In turn, the insurance industry should commit to rebates of at least 10 per cent of premiums paid this year."