Zenith Insurance pulls back on exposure to Irish market

An overseas insurer has pulled back on its exposure to the Irish motor market as the industry grapples with losses amid rising court injury awards.

Gibraltar-based Zenith Insurance, which is understood to have built up as much as a 5 per cent share of the Irish motor insurance market in the past three years, has told ARB Underwriting, an insurance underwriting agency in Dublin, that it will stop writing business through it from June 23rd.

Underwriting agencies, operate between brokers and insurance companies, take the underwriting risk for policies.

ARB is believed to have carried out the most of Zenith’s business of four such agencies it deals with in Ireland.

Total premiums across the four, also including Footprint Underwriting, Bump Insurance and Prestige Underwriting Services, totalled about €50 million last year, industry sources said.

Zenith continues to do business through the other three companies.

Gary Humphreys, group underwriting director for the UK-based Markerstudy Group, which owns Zenith, said: "We are not pulling out of the [Irish] market."

However, Paul Carty, joint managing director of ARB, said Zenith cited a very difficult Irish market, courts system and unhappiness with how industry has been landed with the cost of Setanta Insurance's collapse two years ago among reasons it decided to stop accepting business through the Irish company from next month.

Existing policies

Zenith will continue to honour all existing policies.

The country’s insurance industry has been in a state of turmoil in recent years, as companies failed to raise enough from selling policies to cover rising claims and expenses. Industry players partly blame a spike in court awards for injury claims.

The average award for whiplash in Ireland is €15,000, three times the rate in the UK, industry representative group Insurance Ireland said last year.

In response, firms have hiked motor coverage rates by 34.2 per cent in the year to April, while home insurance costs have been been increased by 9.9 per cent, according to the Central Statistics Office.

Mr Carthy said ARB, formerly controlled by publicly-quoted IFG Group, expects to have a replacement motor underwriter by August.

It is understood ARB, which also underwrites commercial, apartment block, travel and dental insurance, posted profits of more than €1.8 million on €5.5 million of revenue last year and is expected to deliver similar figures this year.