Brendan Murphy has been elected President of the Irish Insurance Federation (IIF) for 2008/09 at the IIF’s AGM today (23/5/08). 

Speaking at the Annual Lunch of the IIF held after the AGM, Mr. Murphy highlighted the dramatic fall in motor and commercial insurance rates, with motor insurance rates down 50% in 4 years in real terms.  The IIF’s Annual Report, published today, points out that car insurance is now effectively cheaper than at any time in the past 25 years.  However, margins in the industry have been pared to the bone and claims inflation remains high, with Irish injury damages still among the highest in Europe. 

Mr. Murphy emphasised that the benefits of recent reforms had now all been absorbed.  He said:

“the one-off effect of revaluing claims reserves as a result of the insurance reform programme has well and truly flushed through the system at this stage, and all of the benefits have been fully transmitted through the significant reductions in the cost of motor and commercial liability insurance which we have seen over the past 3-4 years.”

In supporting a continuation of the flexible, common-sense approach adopted by the Financial Regulator to date, Mr. Murphy called on the Department of Finance’s Advisory Forum on Financial Legislation to develop the concept of Regulatory Impact Analysis so as to make sure that regulatory requirements were necessary and appropriate:

“The process provides a one-off opportunity to assess the value of existing regulatory provisions, and to do away with those that are not justified by prudential or consumer protection imperatives.  It gives us a chance to put rules in place that are logical, consistent, proportionate and cost-effective.” 

Guest speaker at the IIF Annual Lunch was EU Commissioner Charlie McCreevy, whose address covered the EU’s proposals for reform of the solvency/capital requirements for insurance companies (“Solvency II”), possible amendment of the Insurance Mediation Directive (IMD), and the importance of the coming referendum on the Lisbon Treaty. 

Commenting on calls for amendment of the Mediation Directive, Commissioner McCreevy also placed emphasis on a measured approach and on the need to avoid over-regulation, saying:

“In reviewing this we will pursue our Better Regulation agenda.  It is important that it is respected before any further regulatory action is taken.  This will mean adequate prior consultation and an impact assessment of any proposed changes.”

Commissioner McCreevy also called on Member States, including Ireland, to review the way in which they transposed the IMD “to see if some of the ‘gold-plating’ that they have inserted is not adding to the burdens of market operators – burdens which might be lightened by the application of a more light-touch approach.”