The Freight Transport Association Ireland’s (FTAI) Van Safe initiative is a welcome move in the right direction for the light commercial fleet market at a time when the market is still reeling from a variety of events that has shook it over the last 7 years.
A culmination of incidences and events have brought the van market to a place where, to function correctly, it needs a complete overhaul in certain areas and some tweaking in other.
To understand the current marketplace for the van fleet insurance industry, you need to put it in context – what has brought us to where we are now? Several key events spring to mind – namely:
- 2010 Travelers Insurance leave motor market
- 2011 Quinn Insurance Collapse
- 2013 RSA – Parent company injection of €250million+
- 2014 Setanta Liquidation
- 2015 FBD Limited Underwriting Appetite
- 2016 Enterprise Administration – 14,000 Policies in Ireland
- 2016 Gable Insurance Administration
In addition to the above we also have unsustainably low pricing in the motor insurance market, including fleet insurance from 2007 – 2013.
So a culmination of the above has taken its toll on the insurance industry – coupled with a system that awards claims pay out of well above average. All of which has left us where we are today – in a fragile marketplace with very little competition, with 1600 van drivers still in claims limbo as a result of the Setanta collapse, and a steady increase in premiums.
The market is in dire need of action. Earlier this year the Minister commissioned a report on the motor insurance market to address the challenges it’s currently facing with the primary goal of bringing premiums down for consumers. While we welcome the report it will have been an exercise in futility unless the recommendations made in it are put into action.
Ultimately, what the market needs now – and what the Government needs to have in its sights in terms of end goals are the following:
- A favourable Setanta Supreme Court Ruling which will a) allow claimants to get what’s owed and b) bring much needed confidence back to the market – both for consumer and potential market entrants
- More Competition – at the moment we are seeing insurers leave the Irish marketplace at a time when we are in need of competition. We need to incentives companies to come here by providing them with security …
- The implementation of Oireachtas Committee and Ministerial Action plans
The Ministerial Action Plan Report made 23 Recommendations & outlined 71 Action Points. The majority of recommendations will impact private motor customers. For example, they will have a 20 day renewal period; insurers will have to provide a breakdown of Premiums quoted. However the reports recommendations in relation to personal injury are most likely to impact the fleet industry. It calls for increased powers for the PIAB – a move we would strongly welcome. In addition, a claims database would be set up – this would lead to greater transparency within the industry on claims figures. The setting up of Personal Injury Commission was also mooted in the report whereby awards would be benchmarked across an EU wide basis.
We are behind every one of these proposed changes. And as industry stakeholders we have a role to play in making them happen, just like the Freight Transport Association Ireland, has taken on board its responsibility to improve safety standards within the LCV sector with Van Safe initiative.