Minister Donohoe emphasises his concerns to Insurance Ireland regarding the response of the sector to date to the COVID-19 crisis
Messages conveyed to Insurance Ireland members in the interest of customer fairness and the industry’s own reputation
The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Friday) held a teleconference call with Insurance Ireland as a follow up to his letter of 27 March and previous statement. The Minister emphasised his concerns regarding the response of insurers to the Covid 19 crisis, the need for them to play their part in the recovery phase while ensuring a sufficient focus on the cost and supply of insurance by insurers.
Key points made by the Minister included:
- The unprecedented measures taken by Government to address the challenges of Covid 19 and the importance of the insurance sector playing their part;
- Acknowledgement of the various clarifications that Insurance Ireland made regarding business interruption insurance, in particular about where there is ambiguity in the policy that insurers will interpret it in favour of the consumer, and also that their members recognise that the Government advice to close is the same as a direction;
- Concern that some insurers have adopted a “blanket” rejection of all business interruption claims. Failure to pay certain policies in the context of the industry clarifications reinforced the Minister’s view that some insurers were doing the industry significant reputational damage and were not treating customers fairly;
- An emphasis on the fact that Insurance Ireland members, who have agreed to do so, must deliver on their commitments made regarding Forbearance and Business Premises. Those who have not yet signed up are encouraged to do so;
- A call that, on Motor Insurance, insurers must be pro-active and generous in relation to their treatment of motor insurance policyholders. In this regard, he pointed out that a combination of the very profitable part of this market over last 12 months when combined with what is likely to be a significant reduction in claims for this period, provided a strong case for some type of refund of premium package. Thus providing some financial relief to their customers in this extraordinary time;
- Finally, an indication that the cost and supply of insurance remains his priority and will be also be a priority for the new Government and the industry needs to actively engage on the reform agenda.
Minister Donohoe said:
The main message that I wanted to convey to the insurance industry, through Insurance Ireland, is the need for the industry to help itself and do the right thing by customers during this time. I made it clear that failure to do so will be very damaging for the longer term reputation of the sector.
I also thanked Insurance Ireland for the agreement they facilitated last week on forbearance and closed premises, but I emphasized the need for insurers to deliver on it and for those that haven’t signed up to do so. In relation to the treatment of motor insurance policyholders, I pointed out that a combination of the very profitable part of this market over the last 12 months, when combined with what is likely to be a significant reduction in claims for this period, provides a strong case for some type of refund of consumers motor premium package. Finally, I indicated that the cost and supply of insurance remains a priority of mine and expect it will also be one for any new Government. It is essential that the industry fully engages with the reform agenda and does so in the interest of fairness for its customers and their own reputational credibility going forward.