Business And Leadership: Expect 10pc rise in car insurance in 2010 ...

The survey, which was completed by firms representing more than 80pc of motor insurance premiums written in Ireland, showed that over 85pc of Irish motor insurance companies expect their company to increase premiums in 2010.

Over 18pc of firms surveyed expect an increase of up to 5pc, with 50pc expecting increases of between 5pc-10pc and 18pc expecting an increase greater than 10pc, the survey showed.

However, despite the belief that increases in motor insurance premiums are on the way, many of the firms surveyed felt it will be difficult for to implement these increases as customer loyalty may be severely reduced in the face of such premium rises.

The survey also showed that 76pc of motor insurers felt that if speed cameras were widely introduced, premium prices would be more likely to fall.

The Deloitte survey indicated a distinct shift in how consumers are buying their motor insurance now, with 67pc of respondents saying there had been a significant increase in the numbers of policies sold through their internet channel.

This change, together with the rate increases, will mean that there may be a significant change in relative market shares between the main players in the industry over the next 12 months, Deloitte said.

Fall in profitability Deloitte also noted there had been an overall decrease in profitability across motor insurance companies for the first time in five years during the year, with one of the major companies even showing a loss. This analysis was based on the most recent Insurance Statistical review and returns made to the Financial Regulator.

As a result, while over the past number of years there have been releases by companies from prior year’s reserves, the reverse is starting to happen, with companies strengthening past reserves as initial estimates of claims costs prove inadequate.

It is therefore expected that the current year’s premium rates will have to continue to increase to bring profitability to current accident years, Deloitte said.

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