Motor insurance will probably continue to rise in Ireland

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While there has been a lot of coverage about the rising cost of insurance, particularly motor insurance, these and other general insurance costs are likely to continue to rise judging by the content of the Central Bank’s twice-yearly macroeconomic review.

There are two key issues at play according to the report:

  • A recent High Court judgement that has changed the way a significant personal liability claim was calculated, could increase the cost of meeting major claims and force insurance premiums upwards.
  • The combination of increased over-competitive pricing, increased underwriting claims and lower investment returns due to current historic low interest rates, has caused some firms to eat into reserves and will require them to raise their premium income.

The Report states that all insurance firms continue to meet solvency rules and that a growing economy should support price increases.

Elsewhere, it comments that the main threats to the Irish economy remain external, with particular reference to Greece, simmering tensions between Russia and the EU, and the possibility of interest rate hikes in the US.

It concluded that Ireland's economy could grow by more than the 3.8 percent which the Bank had previously forecast.

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