The new personal injuries guidelines have been in effect now for over a month. Sinn Féin supported the Judicial Council Act and these new guidelines for one simple reason, which is that they would bring greater certainty to the level of personal injury awards, reducing the cost of claims, and by doing so should reduce the cost of insurance for customers.
This is only going to happen if insurance companies pass on in full the savings to their customers. As the Tánaiste has said himself, these new guidelines will reduce the level of awards for soft tissue injuries by an average of 50%. In some cases, the level of awards are cut as much as 69%. Put simply, these guidelines will provide significant savings for the insurance industry that must be passed on to their customers in full.
In 2019 the insurance industry made cast-iron guarantees to the Committee on Finance, Public Expenditure and Reform, and Taoiseach that it would reduce premiums if personal injury awards reduced in this way. They told this committee that it would reduce motor insurance premiums by 15% and business insurance by 20%. That is straight from the industry’s mouth. The new personal injury guidelines have provided for just that. We now need to see insurance prices fall and to fall now.
The question that we need to ask ourselves is whether we can trust the insurance industry to deliver on their promises in full. The answer to that question should be a clear “No”. The industry cannot and should not be trusted to deliver on its own.
In September, the Competition and Consumer Protection Commission, CCPC, found after a four-year investigation that five insurance companies, the biggest players in the Irish industry, engaged in anti-competitive cartel-like behaviour and price-fixing over a 20-month period from 2015 to 2016 that led to higher prices for consumers. Indeed, during this period we saw all insurance premiums increase by 21% year on year.
Yesterday, at a meeting of the finance committee, two of these insurance companies rejected these findings, showing contempt for the commission and for their customers. That is the industry that we are dealing with and it should not be trusted at face value. This Dáil cannot provide it with huge savings and then cross our fingers and hope that these savings will be passed on in full to their customers.
At present, that is exactly what we are doing with the new personal injury guidelines. The industry can and should be held to account to ensure that it passes on the savings in full to the customers. That is exactly what is happening in Britain. When the level of awards was reduced there, legislation was passed to ensure that the industry passed on these savings, pound for pound, to their customers.
Many of the big beasts of the Irish insurance industry, such as AXA, Aviva, AIG, Allianz, Zurich and RSA, also operate in Britain and are the big beasts of the insurance market there and are subject to these requirements. The insurance industry here should be subject to the exact same level of scrutiny.
I argue very strongly, therefore, that we need the same type of oversight here. We need to ensure that pound for pound, euro for euro, the savings that will be made by the industry as a result of the dramatic cuts in all awards are passed on to their customers and passed on now. Will the Tánaiste agree that similar oversights and regulations should be brought in here in order that the insurance industry is required to submit information to the Central Bank each year to show the savings that have been made as a result of these guidelines and how those savings had been passed on to their customers.
In my view this will not only hold the industry to account but it will apply pressure on them to do the right thing right now, which is to cut insurance premiums. By doing so and by introducing this oversight, they will have had nowhere left to hide.