Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Customers and businesses are being charged rip-off premiums by the insurance industry. This is squeezing incomes and leading to the closure of businesses throughout the State. The scale of the insurance industry rip-off is paralleled only by the scale of the Government's inaction in failing to tackle the escalating costs and the malpractice within the industry, of which there is probably no better example than the practice of price discrimination that punishes loyal customers when they renew their premiums.

My insurance company, Liberty Insurance, recently quoted me a price of €856 to renew my policy. I did what we all should do and shopped around. I phoned the company and asked whether that was the best price it could offer. I was told that it could reduce the price slightly and that its best price was €814. However, when I entered the same details into the company's website, I was quoted €571, a reduction of €280 or 33% on the offers I received over the phone or in my renewal quotation.

This practice, known as dual pricing, is about punishing loyal customers when they renew their policy. It is a widespread scam in the industry and is costing consumers hundreds of euros each year without them even knowing it is happening. These companies exploit customers who do not know about dual pricing. They rely on the loyalty of customers and use behavioural data and dual pricing algorithms in their systems to charge extortionate prices and push up their profit margins. Everyone with an insurance policy will have to renew it in the next 12 months and I encourage them to shop around and check online. Price discrimination is widespread in the insurance market. It is systemic, completely unjustifiable and flies in the face of the Consumer Protection Act 2007. It harms the interests and welfare of consumers. It is carried out without transparency, penalises loyalty and disproportionately hits vulnerable and low-income customers. It is a rip-off on a vast scale, but nothing is being done here to stop it.

In spite of all the dysfunction across the water in Britain, the Financial Conduct Authority there has launched a major investigation into the practice of dual pricing in the insurance industry after it found that customers renewing their policies were charged as much as 70% more than first-time customers. That is the loyalty premium the industry levies on customers here. In contrast, however, the Government has done nothing to end this practice, penalise the industry or give workers and families a break. Yesterday, I wrote to the Competition and Consumer Protection Commission, CCPC, and the Governor of the Central Bank to ask that they carry out an immediate investigation into the practice of price discrimination by the insurance industry. Will the Ministers for Finance and Business, Enterprise and Innovation support my call for an immediate investigation into the scam of dual pricing? Will the Government support that call and implement any recommendations?

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