Vol. 558 No. 6
9 Ms B. Moynihan-Cronin asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to recent figures showing that the average Irish person now spends 40% more on all forms of insurance than a person in the rest of the EU; and if, in view of the situation depicted in the report, she will outline her proposals to deal with the excessive cost of insurance. [24867/02]
I am aware of the high cost of insurance in the State and that insurance costs in other EU member states are lower than here. However, in some of the other member states, compensation for personal injuries is paid largely through the social security system rather than through private insurance.
On 25 October 2002, I announced my programme for fundamental insurance reform. The programme reflects the commitments given in An Agreed Programme for Government and comprises a comprehensive set of interrelated measures designed to improve the functioning of the Irish insurance market. The key measures include: establishment of a ministerial committee, chaired by me, to oversee implementation of the reform programme, including the 67 recommendations in the Motor Insurance Advisory Board report; publication of the action plan to give effect to the MIAB recommendations within a target timeframe; establishment of the Personal Injuries Assessment Board on an interim basis, pending preparation of the necessary legislation to put the PIAB on a statutory footing; and publication of the report of the implementation group on the PIAB.
In parallel with, and complementary to, the reform programme, my Department and the Competition Authority are undertaking a study into the insurance market. While EU law precludes the imposition of price controls on insurance, I have made it clear that I expect a quid pro quo from the industry in response to my reform programme.
I do not know why Question No. 9 was not taken with Question No. 6.
I do not know either. I apologise.
The answers are the same. We have covered the ground. Has the Minister given any consideration to the difficulties home owners are now having because those who have been flooded are finding it difficult to get any insurance? Has she taken the initiative to ensure that households are provided with insurance, because otherwise they could incur devastating costs if we are to be subject to climate change?
The impact of insurance costs on small and medium-sized industries is an issue I am hearing more about in my own constituency and across the country since I took over this portfolio. What specific measures is the Minister taking to ensure that companies continue to be able to get affordable insurance and that start-up companies are not precluded from beginning their existence and providing decent employment solely because of the unaffordability and, sometimes, unavailability of insurance?
With regard to the second part of the Deputy's question, I do not think the State can underwrite the cost of insurance for companies, whether big or small.
I did not ask that.
I know that, but if the market is not providing competitive rates—
Did the Minister not look at the market?
We are trying to reform the market because we do not have an effective insurance market here. We have too few players and those companies that I would like to have in the market here will, apparently, not enter it until such time as there is reform because it is not lucrative.
In the past, the State did—
Allow the Minister to speak without interruption.
It did, yes, but is the Deputy suggesting that we set up a State insurance company?
No, but I am saying that we need—
Deputy Howlin, allow the Minister to speak. I want to allow Deputy Hogan speak.
I know the State bailed out a certain institution when its insurance arm went under but I do not think anybody would advocate going down that road again. We have to reform the market. I hope the reform programme will do that and, in particular, bring in new players. The competition study will give us access to the most accurate information in respect of the markets to make sure there is no doubt.
Of course I am concerned about home insurance. My colleague, Deputy Parlon, has arranged to have discussions with insurance companies in respect of this issue. There are issues for the State in relation to remedial action that needs to be taken. Certainly, it would be unthinkable if vulnerable householders in Dublin or elsewhere were not to get insurance cover from the insurance sector. We expect insurance companies to cover them, provided that the State takes every action to make sure that it or its authorities are not negligent in respect of drainage and other issues.
Does the Minister agree that the Single Market has failed the Irish consumer in relation to insurance? Will she publish or make available comparative data concerning the cover and premia available in all other EU member states? That should inform a discussion on the implementation of the Single Market in other jurisdictions so Irish consumers will be able to buy their insurance through the Internet, a broker or otherwise throughout all EU member states.
On the issue of small industries, I was not asking the State to provide insurance. Will the Minister outline what particular supports her Department gives to prospective or new small companies or individuals that want to provide enterprise in a community but are prohibited from doing so simply because of their inability to obtain affordable insurance? Is there an advisory system, a support system or a mentoring system run by her Department that assists in difficulties of this kind? Has she quantified in any way the impact of unaffordable insurance on the small and medium-sized business sector?
The Department gave some funding to ISME to carry out research in this area. It published its findings some time ago and the evidence suggests that many jobs are being lost as a result of the high cost of insurance, perhaps in ones and twos and small numbers so one does not always hear about them. There is no doubt that this is making Irish companies uncompetitive.
With regard to support, both Enterprise Ireland and the county enterprise boards have packages of support for people who want to start their own businesses. We do not have specific insurance-related support, but the HSA is involved on an ongoing basis with established companies regarding the best practice to ensure that we can minimise the number of accidents that take place, thereby reducing the cost of employer liability insurance in particular.
With regard to other European countries, I would be delighted to make available and publish any other information I have. The system in many other European countries is different in that compensation is paid through the social security system. That is a fundamental difference and it impacts upon the premium prices. If the State carries the compensation cost, the market for the insurance companies is a lot more lucrative.
