Monday, May 20, 2024

New car and home insurance firm enters Irish market

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South African insurer Outsurance has pledged to bring greater price competition to the Irish market with €160 million investment over five years.

The company, which will offer both car and home insurance to consumers here, is the first fully licensed provider to enter the Irish market in more than a decade.

At its formal launch in Dublin on Monday, the head of the group’s new Irish unit Peter Broome said the Johannesburg-listed group, which operates in South Africa and Australia, had chosen Ireland as its third market from a longlist of 40 countries.

He cited Ireland’s stable economy, its strong regulatory environment and the apparent need for greater competition as the main enticements but acknowledged profitability was also a key incentive.

“The insurance industry in here in Ireland has been relatively profitable since 2015 which makes it attractive … if there’s profits being made that indicates to me that it’s ready for competition,” he said.

“We’re certainly coming in to bring competition and competitive prices to consumers,” Mr Broome said.

The company, which currently employs 70 people at its head office in Cherrywood in Dublin, is planning to bring its headcount up to 300 over the next three years while investing €160 million over five years.

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Outsurance is hoping to translate its model of offering discounts for loyalty instead of traditional no claims bonuses.

If customers stay with the company for three years and have no claims they will automatically be refunded 10 per cent of their premiums, Mr Broome said. Government levies and taxes will not be part of the refund as the insurer is not allowed to return these.

“We will change the way people think about car and home insurance with the introduction of something fundamentally new in Ireland – the outbonus. Customers always pay in, so why shouldn’t they get something out of their insurance when they have not made a claim,” he said.

The company, for now, will sell directly to consumers with a plan to exploit the broker channel at a later date when its pricing and market is more established.

“We’re not going to be the cheapest for everyone but we’re already selling policies as a part of a soft launch and I’ve customers saying they’ve saved anywhere between €200 and €300 on their car policy by coming across to us and on top of that they’re gonna start accruing their out-bonus,” he says.

Mr Broome acknowledged that recent reforms aimed at driving down insurance costs including the introduction of judicial guidelines on personal injury awards in 2021 had also influenced the company’s decision to set up shop here.

“These reforms gave confidence to insurers that they plan appropriately, certainly as a new entrant,” he said.

Commenting on the launch, Minister of State with responsibility for Financial Services, Credit Unions and Insurance Neale Richmond said: “I am delighted that Outsurance have joined the Irish insurance market and will be providing car and home insurance. Increasing competition in the insurance market is a goal under this Government’s Action Plan for Insurance Reform, the implementation of which is largely complete, so Outsurance are very welcome to Ireland.

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