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Review of Differential Pricing in the Private Car and Home Insurance Markets

The Central Bank of Ireland (CBI) has published its final report into differential pricing in the home and motor insurance markets in Ireland. Differential pricing is where customers with a similar risk and cost of service are charged different premiums for reasons other than risk and cost of service. The report identifies, based on a significant dataset (almost 11 million policy records and consumer insights from a survey of approx. 5,500 consumers), where some pricing practices can lead to unfair outcomes for car and home insurance consumers. In response, the CBI has set out a number of proposed changes to the Consumer Protection Code, including:

  • Banning “price walking” (the practice of charging higher premiums, relative to the expected cost, the longer a consumer remains with an insurance provider)
  • Requiring providers of motor and home insurance to personal consumers to review their pricing policies and processes annually
  • Introducing new consumer consent and disclosure requirements to ensure the automatic renewal process is more transparent for all personal non-life insurance products.

The report is open for public consultation until 22 October 2021. 

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Insurance Corporations Statistics – Q1 2021

The Central Bank of Ireland has published the Insurance Corporations Statistics for Q1 2021

  • Total assets of Irish resident Insurance Corporations rose by €15.7 billion to €396 billion during Q1 2021. Listed equity holdings and equity investment fund holdings were the largest drivers, responsible for a collective increase of €12 billion.
  • The €6.3 billion increase in listed equity holdings was mainly concentrated in the €5 billion growth of equities issued by non-financial corporations (NFCs).
  • On the liabilities side, a €12 billion increase of unit-linked insurance technical reserves (**ITRs) was the largest contributor to the €15.7 billion increase in total liabilities for the sector.

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Understanding the Future of Insurance: Climate & Emerging Risk Survey

In May 2021, the Central Bank of Ireland has issued the results of the Climate & Emerging Risk Survey. The Central Bank issued a Climate & Emerging Risk Survey to a representative sample of insurance firms across all sectors (life, non-life and reinsurance) in Quarter 4 of 2020 looking at Emerging Risk, Climate Risk and Cyber Underwriting Risk.

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The Survey has provided valuable information on the current state of firms’ risk management practices. A number of good practices have been highlighted and further work is required to incorporate and embed climate risks, and emerging risks more generally, in organisational risk management frameworks.

Open Consultations

  • CP138 - Consultation on Cross-Industry Guidance on Outsourcing Deadline: 26/07/2021