AXA Insurance dac, Registered in Ireland number 136155. Registered Office: Wolfe Tone House, Wolfe Tone Street, Dublin 1 (D01 HP90). VAT Reg No. 4873544A.
Directors: P. Bradley (UK), D. Crowley, C. Gienal (CH), P. Hazell (UK), C. McDonnell, G. McGinn, R. Quinlan, R. Whelan.
AXA Insurance dac is regulated by the Central Bank of Ireland. For business in Northern Ireland, AXA Insurance dac is authorised by the Central Bank of Ireland and authorised and subject to limited regulation by the
Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request.
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INTRODUCTION
AXA is one of the largest insurance companies operating in the Irish market and the market leader in the motor
insurance market, employing over 1,000 people. The company is committed to the highest standards of customer
care.
AXA has been concerned over recent years that there has been growing public controversy about the pricing models
used by insurance companies operating here particularly in respect of private car and home insurance.
The recent review by the Central Bank of Ireland of Differential Pricing in the Private Car and Home Insurance
Markets is a valuable contribution to this debate. AXA welcomes the publication of the CBI report on this matter,
and we welcome the opportunity now to contribute to the public consultation process being conducted by the CBI
ahead of the introduction of new regulations in this area in 2022.
PRICE REMEDY
1. Do you agree that banning price walking from subsequent renewal is the appropriate solution for the
Irish market and its consumers? Please outline the reasons for your view.
The proposals put forward by the CBI do not represent significant changes to AXA’s current pricing practises
in these markets.
However, we recognise that elements of the current pricing models in the Irish private car and home
insurance markets have become controversial and therefore need to be addressed in order that consumer
confidence in the market can be increased.
The CBI report itself acknowledges that elements of current pricing models do have some benefits for
consumers and increased competition.
2. We believe there is a basis for banning price walking in the motor and home insurance markets for
personal consumers. Do you agree the products in scope of the proposed ban are appropriate? Please
outline the reasons for your view.
We have no issue with the focus on private car and home insurance as per the report by the CBI.
3. What do you see as the positive implications, for consumers and the market, if the proposed intervention
were introduced?
AXA hopes that these measures will help restore consumer confidence in the market while also encouraging
competition amongst insurers, by facilitating pricing-based competition and provide attractive quotes for
customers
4. What do you see as the negative implications, for consumers and the market, if the proposed
intervention were introduced?
The measures outlined will no doubt change the competitive complexion of the sector; it is premature to
be certain how and to what extent.
Additionally, from an industry perspective, it is unclear how these proposals will influence the future design
of product offerings.
AXA Insurance dac, Registered in Ireland number 136155. Registered Office: Wolfe Tone House, Wolfe Tone Street, Dublin 1 (D01 HP90). VAT Reg No. 4873544A.
Directors: P. Bradley (UK), D. Crowley, C. Gienal (CH), P. Hazell (UK), C. McDonnell, G. McGinn, R. Quinlan, R. Whelan.
AXA Insurance dac is regulated by the Central Bank of Ireland. For business in Northern Ireland, AXA Insurance dac is authorised by the Central Bank of Ireland and authorised and subject to limited regulation by the
Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request.
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5. Do you have any views on what, if any, unintended consequence, may arise in prohibiting price walking?
Please outline the reasons for your view.
In the short term it is unclear as to the exact impact on premiums, as there will be a period of normalisation
of rates, which in turn could impact consumer buying behaviour and possibly lead to inertia. The longer-
term impact on the composition and pricing of product portfolios will only emerge over time but may
impact on how new customer discounts are determined and perceived by the industry and by consumers.
Customer queries and complaints in the short-term are likely to increase as the market unwinds historic
positions or alters premium structures.
Customers who are currently protected by year-on-year premium caps (smoothing out increases for new
rating structures, rating factors, or updated rates for claims trends over a period of time) will no longer be
protected as this creates an implicit price walk.
6. Do you have any views on what, if any, unintended consequence, may arise if both dual pricing and price
walking were prohibited? Please outline the reasons for your view.
Prohibiting dual pricing may impact on price-based competition. Ultimately this may discourage new
entrants or limit existing players growing portfolios and producing economies of scale, both of which lead
to lower consumer prices. We need to preserve the ability of existing and new companies to compete for
business.
7. Do you foresee any practical difficulties arising as a result of prohibiting price walking? Please set out
those practical difficulties in detail.
The changes are likely to require amendments to customer documentation and other operational and
system changes to implement, so it is important that sufficient lead in time is allowed for, in order that all
insurers can make the necessary preparations.
Companies may not have equivalent data for year one renewals or historic policies leading to default values
being required for rating. This may lead to inaccuracies compared to the price the customer would
genuinely receive as a duration one customer.
8. Do you foresee any practical difficulties arising if both dual pricing and price walking were prohibited?
Please set out those practical difficulties in detail.
See response to Question 7 above.
9. Do you have any alternative proposal(s) that would address the concerns arising from differential pricing
practices in the Irish private car and home insurance markets?
We are happy to work with the new proposals as set out by the CBI.
AXA Insurance dac, Registered in Ireland number 136155. Registered Office: Wolfe Tone House, Wolfe Tone Street, Dublin 1 (D01 HP90). VAT Reg No. 4873544A.
Directors: P. Bradley (UK), D. Crowley, C. Gienal (CH), P. Hazell (UK), C. McDonnell, G. McGinn, R. Quinlan, R. Whelan.
AXA Insurance dac is regulated by the Central Bank of Ireland. For business in Northern Ireland, AXA Insurance dac is authorised by the Central Bank of Ireland and authorised and subject to limited regulation by the
Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request.
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10. Do you see dual pricing and/or price walking practices as posing a reputational risk to the insurance
industry? Please outline the reasons for your view
AXA has acknowledged the need to increase consumer confidence in the sector generally. We acknowledge
that price walking has been a source of controversy and negative commentary. However, we don’t believe
that the ability to offer new business discounts – which is a well-established practice in many industries –
is comparable. Ultimately the removal of price walking, requiring all companies to operate to the same
standards, will improve confidence levels amongst consumer without jeopardising competition.
ANNUAL REVIEW AND RECORD KEEPING
1. Do you agree with the proposed requirement on insurance providers to carry out an annual review of
their pricing policies and practices? Please outline the reasons for your view.
AXA already conducts an annual review of pricing policies and practices, and we believe that it provides
good governance, helping ensure product offerings remain relevant and competitive.
2. Do you agree with the focus of the review? In particular, do you see any gaps in the proposed content of
the review? Please explain your answer.
The focus of the review is comprehensive and pragmatic.
3. Do you agree with the proposal that, prior to implementing a material decision, insurance providers will
be required to retain a record of their consideration of the extent to which that decision is consistent
with the new rules? Please outline the reasons for your view.
This is in line with current practice at AXA. Retaining records to monitor activity and refine processes and
procedures is a fundamental pillar of strong governance. Balancing it with efficiency and pragmatism will
be the challenge that individual organisations will need to address. A consistent application of the
overarching rules will be critical.
4. Do you foresee any practical difficulties arising as a result of the proposed measures? Please explain your
answer.
These changes (Annual Review and Record Keeping) reflect existing AXA policies, so we do not anticipate
any particular difficulties.
5. Do you have any views on what, if any, unintended consequences, may arise from the introduction of
the proposed measures? Please explain your answer.
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AXA Insurance dac, Registered in Ireland number 136155. Registered Office: Wolfe Tone House, Wolfe Tone Street, Dublin 1 (D01 HP90). VAT Reg No. 4873544A.
Directors: P. Bradley (UK), D. Crowley, C. Gienal (CH), P. Hazell (UK), C. McDonnell, G. McGinn, R. Quinlan, R. Whelan.
AXA Insurance dac is regulated by the Central Bank of Ireland. For business in Northern Ireland, AXA Insurance dac is authorised by the Central Bank of Ireland and authorised and subject to limited regulation by the
Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request.
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AUTO RENEWAL
1. Do you agree that an insurance provider may not renew an insurance policy automatically unless a
personal consumer has provided his or her written consent prior to first entering into the automatic
renewal arrangement? Please outline the reasons for your view.
We believe greater clarity is required around the term “written consent”. It is important that any
requirement recognises the realities of the customer journey (in particular the use of technology to help
make ‘time hungry’ consumers life more efficient) in today’s world. A huge proportion of business is now
conducted by phone or online and a requirement for “written consent” as traditionally understood may
simply not be practical for the majority of customers and may leave customers without cover if payment
on inception is required.
We request the CBI to consider that consent could be given over the phone and the customer could then
‘opt out’ if they so wish once documentation is received after the phone sales process.
In addition, the draft Regulation 10 seeks to limit consent to automatic renewals at inception which would
prevent a customer (during the policy year) opting to switch to a direct debit automatic renewal.
Finally, we are concerned that an ‘opt-in’ basis could lead to more consumers becoming inadvertently
uninsured and some vulnerable customers would lose the benefit of the automatic protection provided by
automatic renewal.
2. Do you agree with the information to be provided to the personal consumer prior to the automatic
renewal of an insurance policy? Please outline the reasons for your view. Are there any further details
that should be included? If yes, please explain your answer. Are there details that should not be included?
If yes, please explain your answer.
Agree.
3. Do you agree with the proposed requirements relating to the cancellation of an automatic renewal
arrangement? Please outline the reasons for your view.
The proposals set out in 5.3.2 refers to the right to cancel which is clear, fair, and appropriate.
4. Do you agree that these proposals should apply to the automatic renewal of all personal non-life
insurance products? Please outline the reasons for your view.
In line with the scope of the CBI review we assume that this is confined to private car and home insurance.
5. Do you foresee any practical difficulties with the implementation of the proposed requirements on
automatic renewal? Please set out those practical difficulties in detail.
We are concerned that there may be certain groups of consumers who could have a difficulty in taking
advantage of the process. We suggest that this is assessed in the proposed examination of vulnerable
AXA Insurance dac, Registered in Ireland number 136155. Registered Office: Wolfe Tone House, Wolfe Tone Street, Dublin 1 (D01 HP90). VAT Reg No. 4873544A.
Directors: P. Bradley (UK), D. Crowley, C. Gienal (CH), P. Hazell (UK), C. McDonnell, G. McGinn, R. Quinlan, R. Whelan.
AXA Insurance dac is regulated by the Central Bank of Ireland. For business in Northern Ireland, AXA Insurance dac is authorised by the Central Bank of Ireland and authorised and subject to limited regulation by the
Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request.
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customers referred to in Section 5.5.2.
6. Do you have any views on what, if any, unintended consequences, may arise from the introduction of
the proposed measures? Please explain your answer.
We believe that they are fair and appropriate.
Conclusion
Consumer confidence is vital to the private car and home insurance market in Ireland. AXA supports the efforts of
the CBI to ensure that this confidence is encouraged and that all industry players are required to operate fair, ethical
and reasonable pricing models.
We welcome the opportunity to participate in this current review exercise. Equally importantly we look forward to
further consultation with the CBI in respect of the issue of pricing-based complaints and the position of vulnerable
customers which is a key concern.
