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Law360, London (April 28, 2020, 11:48 AM BST ) AXA said on Tuesday that it will provide €20 million ($21.4 million) in refunds to auto insurance customers in Ireland because drivers are using their vehicles less during the coronavirus lockdown.
The rebates will apply to 600,000 customers who had insured cars, motorbikes, vans and taxis, the French insurer said.
The move comes after trade body Insurance Ireland called on members to consider offering refunds after a meeting with the country's finance minister, Paschal Donohoe.
Zurich, RSA, FBD and Allianz have also signed up to the initiative, although AXA is the first to put a figure on the scale of refunds. The other companies were contacted for comment on Tuesday.
"AXA is very mindful of the impact of this crisis on individuals and businesses across the state as we continue to do everything we can to support our customers and the community at this time," Phil Bradley, AXA Insurance Ireland chief executive, said.
Insurance Ireland said on Friday that the lockdown had reduced vehicle use and that insurers would make savings from dealing with fewer claims.
"Given the different pricing models and different customer profile of each insurer's book, the precise amounts will vary across the market," the trade body said. "Each insurer will independently calculate the detail of discounts/rebates involved and communicate with its customers in the coming weeks."
AXA is the biggest insurer in Ireland by premiums, followed by Allianz and Aviva. Aviva said in a separate statement Tuesday that it will not offer refunds but will give customers the option to suspend motor cover for a period if they are not using their cars.
The move follows a decision by the U.K.'s largest motor insurer, Admiral, to refund £110 million (£138 million) to 4.4 million customers.
An insurance technology company, By Miles, claims that, according to its data, there has been a 69% drop in average miles driven across the U.K. since the start of the lockdown. Motor insurers stand to gain £1 billion from the fall in vehicle use, the company added.
But the Association of British Insurers has rejected calls for an industry-wide initiative on refunding motor premiums.
"The motor insurance market faces continuing cost pressures, arising from increasing repair bills and higher theft claim payouts," a spokesman said on Tuesday. "Pricing decisions will be a matter for individual firms."
--Editing by Ed Harris.
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