Pauline Tully (Cavan-Monaghan, Sinn Fein) | Oireachtas source

I commend my colleague, Deputy Doherty, on bringing forward this very important Bill on the overcharging, on a systematic basis, by insurance companies. While there may be claims to the contrary, it is without doubt that the vast majority of insurance companies operating in Ireland use dual pricing or differential pricing. The loyal customers who do not shop around for better prices see their premiums increase year on year at renewal time, despite having no claims for the previous year. While everybody is encouraged to shop around to get the best price possible for their insurance premium, it is a headache to have to do it. It takes time and requires making countless phone calls or going online to fill in the information on various websites, which is not always an option for people who do not have access to a computer or are not computer literate. Insurance companies are taking advantage of people who do not shop around, primarily older people who have been loyal customers for years. Just because they do not check prices, it is not a fair way to treat people. The practice of dual pricing must end.

Different customers with similar risk and cost of service profiles are paying different premiums for reasons other than risk and cost of service. This is happening with car and home insurance. Insurance customers are being discriminated against and put at a disadvantage when trying to renew their insurance with companies that use the dual pricing method. It is obvious that insurance companies are thinking of their own profits and not thinking of the welfare of their customer base.

Many customers do not understand how insurance operates and they tend to do what is easiest without looking at what is the best value. The insurance companies know this and take advantage. Studies have found that there could be a difference of up to €1,000 in prices quoted to the same person and for the same car, which is ridiculous. Another study on home insurance shows the average premium charged was 29% higher for renewal business than for new business, despite the expected cost of renewal business being 6% lower than the cost of new business.

There is clear evidence that customers are punished for loyalty and that the longer a customer stays with an insurer the higher the amount they pay in excess of what is required to cover the expected cost of the policy. Customers are not being put at the centre of pricing decisions, which is basically exploitation. It is about using vulnerable people to make money out of them. Dual pricing must end.

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