Motor insurers have buckled under pressure from the Government and now say they will offer rebates to customers.
Allianz, Axa, FBD, RSA, and Zurich have given a commitment to introduce what they call premium reliefs for motor policyholders.
This is to reflect a lower volume of claims due to the travel restrictions. Each insurer is to offer different rebates based on their claims experience, Insurance Ireland says.
Finance Minister Paschal Donohoe last week told insurers in a teleconference they need to offer rebates on motor insurance.
He said motor insurance was highly profitable and insurers were benefiting from a drop in traffic volumes.
Now the largest motor insurers have said they will offer some form of rebates to customers, although it is not clear what exactly will be offered.
Insurance Ireland said in a statement: “Each insurer has a different mix of customers and different claims experience and they will each assess the impact on their customers and in turn pass on appropriate financial supports directly to their customers.”
The lobby group for the industry added that the financial supports, such as refunds or discounts, applied by each insurance company will reflect their individual claims experience to date.
If extended Covid-19 restrictions on movement result in sustained lower road usage and claim frequency through the summer and beyond, insurers have agreed to further review the situation.
Each insurer will independently calculate the detail of discounts or rebates involved and communicate with its customers in the coming weeks.
Chief executive of Insurance Ireland Moyagh Murdock said: “We are now six weeks into the Covid-19 restrictions on movement and it is clear that road usage levels have fallen significantly.
“While the duration of these restrictions is still uncertain and it is still too early to fully assess the financial impact on the motor insurance sector, but recognizing the unique challenges in the Irish market, insurers have agreed to address the issue by signing up to a set of core principles.”
Analysts have said the rebates will not cost insurers anything as they are gaining from lower claims being made.
In a statement this afternoon, Mr Donohoe called on the individual insurers to quickly come forward with information on the scale of likely premium refunds.
He also noted that Insurance Ireland has indicated that those taking this step will also continue to review matters as the situation evolves over the coming period.
“In my recent engagement with Insurance Ireland, I had called upon their members to act on a motor premium to reflect the new realities of Covid19. I wish to acknowledge today, that a number of the leading motor insurers in the Irish market have today signed up to commitments on premium reliefs for motor customers,” Mr. Donohoe said.
“This is an important step by the sector and I also appreciate that these insurers will keep the matter under review to see how best they can serve the needs of their customers.
“Obviously it is for each insurer to look at its own situation and customer base, but I stress the importance for them to take a longer-term perspective and be generous with their customers at this time reflecting the recent profitability of the motor insurance market.”