The Irish car insurance industry has been shaken up with the announcement of Revolut’s plan to undercut conventional insurers by a significant 30%. Revolut, a fintech start-up, promises to make car insurance more affordable and accessible for Irish motorists. With the industry’s herd instincts coming into play, the question now is whether other insurers will follow suit or risk being left behind in this rapidly changing landscape. This article delves into Revolut’s vow and its potential impact on the Irish car insurance industry.
Eamon Waters, who sold his Beauparc Utilities group to Macquarie Infrastructure Fund for €1.3 billion in 2021, has been successful in his investments in Irish stocks. His Sretaw Private Equity Unlimited vehicle holds a 12% stake in FBD Holdings, where the stock has increased by 24% this year, outperforming the Irish stocks index and the wider European insurance sector. FBD reported pretax profits of €74 million for last year and plans to pay out dividends and excess capital to investors. The motor business of FBD, which earned nearly half of total premiums last year, was more profitable than the wider group. AIG will underwrite Revolut’s plans to offer car insurance premiums that are up to 30% cheaper than the next-best provider in the market, and South Africa’s OUTsurance intends to enter the Irish motor and home coverage market next year. The Irish motor insurance industry only broke even from 2009 to 2021, but industry reforms have been implemented to mitigate volatility. Challenges remain for insurers to price risk responsibly.
Only time will tell if Revolut’s vow to undercut Irish car insurers by 30% will reactivate the industry’s herd instincts. While some may argue that competition is healthy and necessary, others might worry about the potential consequences of such aggressive pricing strategies. Regardless of the outcome, one thing is for sure: the car insurance landscape in Ireland is changing rapidly, and insurers will need to adapt to survive. Whether they choose to follow Revolut’s lead or carve their own path, one thing is certain: the days of complacency are over. Irish car insurers must embrace innovation, think outside the box, and be ready to compete in this new age of disruption.
