A new report on insurance pricing has revealed that consumers have been charged with artificially high premiums at renewal stage.
Pearse Doherty TD has described today’s Report on Dual Pricing in the Insurance Market by the Central Bank as a damning indictment of the insurance industry, and has said it represents a “victory for consumers.”
Doherty has long called for a ban on the practice, which leads to consumers being charged high premiums on renewal.
The Central Bank launched its probe in the wake of a complaint by Teachta Doherty to them in October 2019. The Central Bank report published today has proposed a ban of the practice of ‘price walking’, whereby insurers increase the premiums of loyal and renewing customers by stealth. This is the loyalty penalty that punishes renewing customers with artificially high insurance premiums.
Speaking today, Pearse Doherty said: “Dual pricing has been used to target customers who are less likely to shop around and results in them being charged artificially high premiums at renewal. This is the loyalty penalty.
“The Central Bank has found that renewing customers are paying significantly more than the actual cost of their policy.
“This impacts 3.5 million motor and home insurance policies.
“We know from previous Central Bank reports that motor insurance customers are being overcharged by as much as 25% a year, while home insurance customers are being overcharged by as much as 35%.
“This has to stop. Dual pricing discriminates and it distorts the market.”
Doherty TD has welcomed today’s report and its recommendations.
“It represents a victory for consumers,” he said.
“We now need to move to implement the proposals as soon as possible and to put a stop to the insurance industry and its dodgy practices.
“I will now engage with the Central Bank and the Department of Finance to ensure that the changes necessary are robust and fair for consumers; following on from the proposals I put forward in legislation in January.
“Until the changes come into effect next year, I would encourage consumers to shop around in order to get the best quote possible and not to simply accept the quote they are given on renewal of their existing policy.”