In the interest of consumers the Central Bank of Ireland ought to have considered prohibiting all unjustified price differentials observed in the market, Brokers Ireland said in response to the most recent publication by the Central Bank of Insurance Regulations intended to combat differential pricing in motor and home insurances.
Cathie Shannon, Director of General Insurance at the organisation, which represents 1,250 Broker firms, said given the Central Bank’s consumer protection mandate, Brokers Ireland had hoped that it would reconsider its draft proposals and ban all unjustified price differentials, not just those impacting customers as a result of length of tenure.
“All consumers are equally deserving of the protection of the financial regulator. However, the regulations do at least now put an onus on insurance companies to review their pricing practices and to take cognisance of and mitigate the harm caused by price walking.
“Insurance companies will now have to demonstrate that they do not discriminate against their most loyal customers, which is a particularly disagreeable practice,” she said.
The CBI still allows insurance companies to offer new customer discounts.
“Therefore, it is clear more than ever that it is a wise move for consumers to shop around at renewal time for home and motor insurance policies, to ensure they achieve best value.
“Insurance Broker customers can be assured that their Insurance Broker will search the market on their behalf and obtain the best offer available, they have the expertise and know the risks to look out for,” Ms Shannon added.
She said insurance companies ought to be providing fair value for all consumers.
“Differential pricing damages the relationship of trust the insurance industry should be encouraging by offering fair value to all. Insurance is a particular kind of product that is largely essential rather than optional,” she stated.
Ms Shannon said Brokers Ireland would be considering the feedback statement and the regulations.
“The devil is often in the detail,” she concluded.
