I thank the Senators for participating in this evening's debate. I appreciate the opportunity to speak about the report and hear Senators' reflections on it as well as what they are hearing from their constituents up and down the country. A big part of how we were able to do the work was that people got in touch with their Deputies and Senators, who in turn got in touch with the working group or the committee to pass on the information we needed. I thank those Deputies and Senators who fed that information through to us, as well as all the stakeholders who engaged with our working group and helped us put together the report. I thank the working group itself, which is comprised of representatives from public agencies including the Central Bank, the State Claims Agency, the Personal Injuries Assessment Board and various Departments. The manner in which the work of the joint committee and the working group was done is a model for how the Government, Oireachtas and industry stakeholders can co-operate to get a meaningful outcome and a result that we can put into action and see delivered. It also is part of keeping oversight over the Government to make sure we are living up to our commitments.
These insurance increases of which we have been made well aware by people up and down the country and which we have experienced ourselves have undermined the personal gains people have made through wage increases or personal tax reductions as the economy has recovered. They have also challenged competitiveness for businesses. We need to keep a constant eye on our competitiveness to keep the economy fit, especially because of the Brexit challenges that are coming down the line. We have moved from motor insurance, which was the first part of our work last year. In our second phase we are looking at employer's liability, EL, and public liability, PL. I will come back to that issue in more detail as Senator Lombard raised it specifically. The reforms we brought in to the motor piece, particularly in respect of the Personal Injuries Commission, the transparency issue, and the stronger powers for the Personal Injuries Assessment Board, will feed into EL, PL and other areas as well.
The comments of the Acting Chairman, Senator Horkan, about transparency over claims and what we need in that regard hit the nail on the head. The ability to negotiate is quite important. We have to recognise that this is a market and, if they shop around, people will get a better deal. One of the reforms in the action plan is to give more people time to shop around, as well as more information as to how their premium has been calculated and the reason for any increase that has been applied. Consumers will then be better informed and better able to take advantage of the marketplace. There are things we need to do to improve that marketplace and I will come back to them. Senator Paddy Burke raised those issues.
On the public quantum, Senator Horkan is absolutely right that it is not and should not be a target for claims. It is a historical reflection on claims that have been delivered. That is why the work of the Personal Injuries Commission will be so important. It is going to create that guide through the grading of different types of personal injury, the grading of whiplash and through the international benchmarking exercise it is going to carry out. That will provide better information to guide the awarding of claims by the judiciary. I thank the chairman of the Personal Injuries Commission for taking on this important piece of work. He is very committed to it, as I know from my own interactions with him. The terms of reference and timeline are given on page 100 of the report, as well as what they hope to achieve.
The technology for tracking driving does exist. The Port Tunnel in Dublin is going to have a camera at either end in order that one can tell the average speed through the tunnel. People will be fined if they are seen to have breached that speed. We can do that on parts of a motorway, for example, although a couple of refinements need to be taken on board. There is no reason we should not be using technology to make our roads safer. Road deaths are needless and we should do anything we can to prevent them from taking place.
Regarding oversight of the implementation of the report, it is right that we put in place an action plan stating every single step. It is right that we put in place the responsible actors for implementing those steps. Too often in the past, when the Government has talked about doing something, we have not known who is responsible for achieving it. It is right that I produce quarterly reports and attend the committee and this Chamber to be answerable on them. The Oireachtas should play an oversight role for Government action.
Senator Kieran O'Donnell talked about the 70% of claims over which we have no transparency. That is a big problem. How can we talk about what is actually happening and improve things in the future if we do not know what 70% of the claims environment looks like? It was a key point in the joint committee's report, which focused on the transparency issue and made its importance quite clear. The joint committee was able to do in public what we were doing in private as a working group. It explained to the public what are the different problems, took away some of the cobwebs, demystified the issues and showed that it is a complex area in which the problems cannot be solved overnight. That was very helpful.
Senator O'Donnell puts a very high value on empirical evidence, and he is right to do so. We have to be driven by the data, which lead us to where the actual problems are. We must not be taken in by false narratives that are put out into the public domain, which would take us down blind alleyways and away from where we need to go. As for the book of quantum, the Judiciary has an important role in this regard.
In other jurisdictions they publish their own version of the book of quantum. What we are hoping to do through the personal injuries commission and through the greater powers that we are going to give the Personal Injuries Assessment Board, is that we can get their joint work together on a more formal footing with the Judiciary. That is key. That is the ambition that is in the report.
A number of Senators raised the issue of cartels. This is being worked at but not by the Department of Finance, it is not its responsibility. That work is separate to mine, but I have raised my own concerns with the Competition Authority during the process last year. The example which Senator O'Donnell gave sounds like something that might be for the declined cases process. There is a section in the report which speaks to reforming that process by making it more transparent, more understandable and more accessible to consumers.
We ought to be mindful as we seek to reform the market and bring in new transparency measures that we do not bring about anything which might lead to price signalling or price fixing in the market. We have to recognise that these are individual companies which are competing in a market and we would not want to unwittingly help them to do something that they should not do through our own desire and zeal for reform.
It is important to note that premiums were too low in this country. They were unsustainably low. In recent times we have also seen an unusual situation where there have been negative yields for investment companies which has affected their model. It is important that we recognise that, as we seek to reform the insurance market and bring about fairer premiums for consumers, we will not go back to the very cheap premiums that we saw in the past because they were not sustainable.
Senator Craughwell asked about the sharing of data publicly and how easy that should be. He is absolutely correct. Insurance companies collect a huge amount of data in a very professional way. As we seek to put in place a national claims information database to be held by the Central Bank, we have to be mindful, first, that we do not get in the way of any data protection laws which might undermine that database once it was in place but, second, that companies define data in different ways. They define incidents, cases and claims in different ways so we need to come to a single understanding in order to interpret that data so we can collate it and decide what the parameters are. That work is already under way but it needs to be done before the database is up and running. For uninsured driving in the third quarter of this year, the uninsured drivers' database will go live for use. Having that in place early will be a very important achievement.
There is a long tail in the legal process and the claims process. If we can make the Personal Injuries Assessment Board stronger, so that fewer cases fall out of it, if we can have things like pre-action protocols in place that will keep more cases from getting to the steps of the court or getting to a litigation phase, that would be beneficial to shortening that process. In addition, if we are able to get greater consistency over awards - which is why the work of the personal injuries commission is so important - we should be able to shorten that process. It would also help us tackle those exaggerated or fraudulent claims which increase the cost to all of us who drive.
The goals of the Personal Injuries Assessment Board are: to increase the percentage of cases that remain within it; to make it quicker for the claimant, where there is a genuine and legitimate claim; to make it fairer for both sides in the process; to eliminate fraud; and make it cheaper for all drivers. The quicker a fair claim is settled in a fair way for the claimant, the less of a cost there is for the insurance company and the less of a cost there is for all of us who drive.
Senator Craughwell raised concerns about first responders. I am aware of this concern and understand the difficulties that some of them are facing in this area. I know from the insurance agencies that they are weighing this as a higher risk considering some of the duties that may be performed as a first responder, such as the need for haste, and locations in the country and we need to be mindful that insurance companies must price their premiums based on the risk as they assess them. As Senator Feighan pointed out, the Government cannot interfere in the pricing of insurance products because it is against EU law.
Senator Warfield spoke about the action plan. It is important to stress that there are timelines and designated actions to designated Departments and agencies. They have their responsibilities and we are already reporting on those actions. Very recently, perhaps in the last couple of weeks, following its appearance at the joint committee, the Department published an update on what has already taken place and what we are already doing. This is ahead of the quarterly reports. I wanted to be clear to the committee that work has already begun and I am committed to making sure that work is done in accordance with the timelines set out in the report.
Of course the insurance industry has a role. I am not going to let anyone off the hook in that regard. It is not a case of me saying to the insurance industry that I trust it to go ahead and put all of these reforms in place. It is a piece of this, one stakeholder among others. It is right that the Department of Finance, in the role that I have had chairing that working group across government, has identified the right reforms, who is responsible for implementing some of them and that we now drive those reforms according to the timeline that we have. It is not about defending the industry or letting it off the hook in any regard. We have put it at the centre of this initiative. It is responsible for reforming itself and we will play the oversight role, with the help of the Oireachtas and with the joint committee to make sure it does so.
Senator Warfield raised the issue of the formula. This also came up in the joint committee and I told it then that it was under consideration. We know it works in other jurisdictions and I have an obligation to examine things where they work. I also understand the risks that are in place and we will not move quickly on this. We will make sure that we are aware of all the concerns and we can have a proper debate in the Dáil if we are to move to this new type of model for funding the Garda Síochána's detection of fraud.
Senator Daly raised a key issue in all of these things which is implementation. There is no point in producing a report and letting it sit on the shelf. A year later, when people ask what has been done, the Minister replies that it has been a bit of this and a bit of that. That is why we have gone with this action plan model and have laid it out very precisely. Someone said that 71 actions is too many, but if one takes some of those actions, seven or eight relate to one particular thing, one key priority that we wish to achieve. The reason there are seven or eight actions is to show the exact steps so that if we miss a step, Senators can pull me in here and ask what is happening and why there is a delay. This is to avoid us missing it and six months down the line, I might say that four months ago there was a problem and I am sorry that I did not tell Senators about it then. This means that Senators can better hold me to account and it makes sure that I can get my work done to the standard that there should be in government, which is transparency and accountability over the work as it does it.
Do the recommendations go far enough? There is a suggestion that the compulsory element of motor insurance makes it a great market to be in. We know from the data, that most insurance companies and their motor sections, have not been recording profits in recent years. It has not been a great market for them. In addition, if it is such a great market, why is there not more competition, particularly in certain sub-sectors to which other Senators have alluded? There have been suggestions of a cartel and I cannot comment on that. However, the more data we have and the more transparent that data, that will let us know exactly how good a market it is and will prevent companies - or as some people here are suggesting the industry - from being able to protect itself from proper scrutiny and we can get a proper understanding of just how healthy the market is. That is something that we do not have at the moment.
Our reforms will bring those databases together. Some databases talk to each other, others do not. Some companies in the industry consult databases, others do not. We must make sharing of data and the linkage of databases compulsory. The master licence record, which we are now expediting, will be key to this. All this information will be joined up and identified with one single number for one driver so it is possible to see what the situation is for drivers regarding their insurance, tax, road history and what car they are licensed to drive. That is very important when we look at the commercial side of this, with companies operating fleets.
Young drivers are a very difficult element. Insurance companies will explain that they assess them as a higher risk and therefore there is a higher amount to be paid out. If one looks at areas where there are not strong transport links, say in rural areas, and Senator Hopkins has spoken of her own constituency, a car is essential to young drivers as they become adults so they can go about their adult lives. The intention is that the general reforms will help those younger drivers. When we look at the declined cases agreements, and the reforms we want to introduce, those will help young drivers. Telematics will help them. Some insurance companies are using telematics in cars to help deliver lower premiums for young drivers. I want to see every company do that. I want to see young drivers taking those telematics on board to help get themselves lower premiums but it is not just a money issue when people are driving. As new drivers come onto the roads, they will help them drive more safely. Any death on the road is a needless death. It does not need to happen and we are doing everything we can to prevent such deaths.
Senator Reilly spoke about drivers in rural constituencies and the difficulties that they, in particular, are having with premiums which are unaffordable. It is not a casual matter. This is a necessity and it is essential that we bring about these reforms to make sure that the insurance market is not pricing people off the road who need to be on the road. Unfortunately, the evidence suggests that there has been an increase in uninsured driving. It can only be related in one part to the fact that premiums are becoming so unaffordable in certain parts of the country.
Senator Reilly raised the issue of public liability insurance. As I referenced, that is the thread on which we are working. When we looked at the fraud database we wanted to put in place, we looked at a number of markets and models. There is a claims underwriting exchange in the United Kingdom and it is the preferred model. The insurance industry is to pay for this database which will be held by an independent body. The key piece in getting it in place is data protection which is becoming more and more important as more and more data are digitised and put online. When we have the fraud database in place, we will have to make sure no one will appear on it by accident because that would be defamatory and we would face legal cases. It could risk several years work being shut down because we had moved too quickly and infringed on a person's rights. We have to get it right, but we are going to do it in the two-year timeframe outlined in the report.
We need to remove the incentive for insurance companies to settle claims early. Insurance companies talk about there being an economic incentive to settle a claim early, even when they think it might be suspicious. I spoke about this matter earlier. The reforms mentioned in the report will help in this regard. We are also going to make it mandatory for insurers to consult policyholders before they settle a claim. Too often we have heard from constituents and citizens how something innocuous in a carpark later led to money being paid out by an insurance company without consultation with the policyholder. That is not fair; the policyholder needs to be consulted. By strengthening the PIAB, bring forward pre-action protocols and bringing about consistency in the awards given, it will shorten the process.
I spoke about uninsured driving, a matter raised by Senator Reilly. The database will go live in the third quarter of this year. The Senator spoke about fees, legal and non-legal. They are a consideration. We are will keep looking at this issue and reviewing the position until the work is done. As I said, we are in the second phase of our work, looking at employer's and public liability insurance, but we are driving on with implementation of the first piece of our work, the motor insurance piece. As we do so, we are finding new reforms that we want to put in place. Later in the year, we will publish the addendum to the motor insurance report, the report on employer's and public liability insurance, and will be making a couple of changes to the motor insurance piece to include further reforms that we consider necessary and helpful to the market.
Senator Hopkins has been absolutely dogged in her pursuit of this issue, as others in this House have been. I compliment her on her work. Not only has she raised the issue publicly, she has also been in contact with me privately on a number of occasions to see how she can help and what work is being done. That kind of help from Senators is very welcome. The Senator is right to point out that there will be premium rises for some consumers this year. There is no point in trying to fool people. This problem will not be fixed overnight, but we are working day and night to fix it. However, in the course of this year, people will see their premiums going up and we need to be honest with them. It is important that those of us who have worked for so long on this issue and know of its complexity be honest with people. We are moving to fix this problem for them, but it will take a little more time. The national claims information database will answer many of the questions concerning the 70% of claims mentioned by Senators Hopkins and Kieran O'Donnell in terms of what is happening in the claims environment. That will help to improve our understanding of how we need to tackle the issue further into the future. As pointed out, the personal injuries commission is a vital piece of the puzzle. I refer Members to page 100 of the report which includes the terms of reference and the timeline involved. People will see exactly what it is to achieve. I have spoken to the chairperson who is absolutely committed to getting things done quickly.
We are, as I said, looking at employer's and public liability insurance. As I have not yet met any representative from the farming community, if the Senator can help to identify the best people to whom to talk, I will meet them immediately. Today I met representatives of business groups, individual businesses in the entertainment industry and the Vintners Federation of Ireland. We had another working group meeting this week when we heard presentations by representative bodies. As new concerns are raised with me, I need to meet the people concerned in order that we drill down into their data to gain an understanding of their concerns. I would appreciate it if the Senator shared the names with me.
I have met the representatives of hauliers. They appeared in front of the joint committee and we are aware of their concerns. It is a very challenging environment for them and it will be made even more challenging by the Brexit dimension. The changes they want to see made in the market can only be made at a European level, but I have made a commitment that we will raise the issue at a European level to see if we can achieve some consensus on the insurance piece. There is an insurance single market. Insurance companies based in other jurisdictions can operate here on a freedom of enterprise or service basis, but they can only do so if they are willing to register and contribute. That is the key piece. They can operate here, but they need to make sure they operate to what the courts have determined in terms of their obligations. They have several concerns about companies flying under a different flag to avail of the offerings of insurance companies in other jurisdictions. This something we will have to raise at a European level.
Senator Feighan spoke about livelihoods and jobs and how they were being threatened. It is very important that we work together to tackle this issue. We need to work together on the legislation that will be brought forward this year as part of our work in the Dáil and the Seanad to fast-track it and make sure it will come through without unnecessary delays.
The Senator is absolutely right when he talks about the massive correction in prices we are seeing. What we are talking about are super cycles in the insurance industry which are incredibly damaging, not just for the industry - one might say damage to the industry is the least of our worries - but also for consumers. Yes, they avail of lower premiums, which is very helpful when it happens, but that is no good to anyone if we are to see a 50%, 60% or 70% hike in premiums in a very short period of time. There are a number of reasons we seem to have super cycles. As they are listed in the report, I will not go into them. Solvency II is one of the reforms on the back of the financial crisis. Senator Kieran O'Donnell is nodding; he knows all about Solvency II. It is to help to protect us from super cycles, but the reforms mentioned will protect us too. If they are introduced, we will not be back to paying insurance premiums of €150 or €200, which would not cover the cost of replacing a windshield. That will not happen and we need to be realistic on that front.
We are almost there on the introduction of automatic number plate recognition technology, while the uninsured driver database will go live in the third quarter. That is very important. We are behind in how we use technology in tackling these issues, but the changes will come quickly now because there is a commitment from the industry to work with An Garda Síochána and the Department.
We have been working for over one year to reform the insurance sector. The working group I chair was set up last June. I was asked to chair it by the Minister for Finance, Deputy Noonan, and the first piece of work was the compensation framework which needed to be addressed to deal with company failures, which impact on all drivers because premiums are weighted with levies. We needed to make sure there was a proper compensation framework in place. That work has been complicated by an ongoing dispute in the courts, but progress has been made with the insurance industry on how we might bring certainty to what the compensation framework should be. Once that piece of work was completed early last year, we had to look at the issue of flood insurance because of the experiences of people last year, in particular. It was very important that that piece of work be completed and it was completed under the Minister of State at the Department of Public Expenditure and Reform, Deputy Canney. We were then able to move to the non-life sector. The working group was set up and we decided to prioritise motor insurance because the issue was affecting everyone. We are now moving to consider employer's and public liability insurance which is very important to business.
Senator Lombard spoke about this being a tax on rural Ireland. It is very interesting that he put it that way because some of the suggestions from other parties which might be considered to be on the left of the spectrum would involve the State getting involved in providing insurance cover. The models I have seen where the state provides insurance cover operate by means of an increase in the price of petrol to cover insurance costs. I understand that the more one drives, the more one will pay. That is not a fair way to do it, particularly if one is living in parts of the country where the public transport network is not good and one has to travel long distances to work. That is why I am not in favour of the public models suggested, but we are continuing to look into the matter because I want to make sure we have not missed anything.
The Senator also raised the issue of uninsured driving. It is incredibly important and we are moving to address it.
To explain what is happening on employer's and public liability insurance, we finalised a report on motor insurance at the end of last year. We moved to publish it once I was able to bring it to the Cabinet at its first meeting this year. We have begun with the working group to work on the terms of reference for the employer's and public liability insurance piece. We have engaged with a number of stakeholders which have been giving us very helpful information on what they are experiencing as employers. Most of the work done so far has been on public rather than employer's liability insurance. Earlier this week we heard about businesses such as pubs and hotels that might have hosted birthday parties or wedding receptions but which are now finding it impossible to get insurance cover at a price they can afford to continue to offer these services. They have to take out that piece of the business offering and in so doing are undermining their business as a whole. That is something we really need to address.
When we have finished this phase of our work, which will be in the next couple of months, and once I am clear I have identified everyone I need to talk to, we will produce an addendum to this report. We will then probably reproduce the documents as one final report because there are a couple of changes I want to make to the motor section also. I hope that work can be completed by this summer. That is the timeframe we are working to. The work on the personal injuries commission and national claims information database has already commenced. All that will help because it is not particular to the motoring aspect; it is particular to data, injuries and everything else. The report being called for will come.
I thank Senators for their support and kind comments. It is helpful when we can work together. They are absolutely right to talk about Brexit and competitiveness. That is key. When in Canada as part of the Government mission around St. Patrick's Day, I was talking to people who wanted to return home and who have seen the improvements and the jobs that exist. The jobs are not just in Dublin but also around the country. The people are considering factors such as the cost of motor insurance and asking whether their no-claims history will be recognised and whether the fact that they have a licence and have been driving in Canada will be recognised. It is a concern for them and absolutely needs to be tackled. Where people want to return home to work, live in a community, play on the local sports team and bring life back to our communities, we need to ensure factors such as the cost of motor insurance are not stepping in their way. This would be a really stupid thing - sorry, I cannot find a better word - to let get in the way of people who want to return home and make a positive contribution to their community once again.
Senator Paddy Burke referred to the amount of time the joint committee spent on this issue. The public nature of the joint committee's engagement was very helpful in promoting public understanding of what the real issues are. It has helped in trying to end the blame game we saw. It is in no one's interest to have people in different parts of this industry and market going on air and publicly blaming one another at every opportunity. We need to find the solutions for the future and drive those forward. The committee's work was very helpful in that regard. It was also very helpful in making us realise this is not a simple issue. It is a complex issue and there is no silver bullet. As the joint committee's report stated, along with the working group's report, there is a suite of reforms that need to be implemented. Implementation takes time but as long as we are working together and there was oversight of both sides of the process, we can get it done.
The Senator is absolutely correct about insurance and how it is being viewed at the moment. Insurance used to be seen as a necessary protection, be it for a business or a driver. Now the insured is regarded as a target that encourages one to make a claim. We need to move away from that kind of environment and culture completely. We need a more transparent, stable and competitive market. I agree with all the sentiments in that regard.
The Senator raised the issue of hauliers. I am aware of his concerns, which he raised in the past. The hauliers are looking for change. We are trying to work with them to find the means of effecting the necessary change. The difficulty is that the change they seek in many areas regarding insurance is change that requires consensus at European level. Everyone knows consensus-building at European level takes time. That said, the other reforms we are implementing should have a positive impact for the hauliers as they seek insurance in the future.
The Senator raised the issue of cartels. That is not a matter for which my office has responsibility but we are aware the matter is being considered.
I thank Senators for their engagement this evening. I am more than willing to come into the Chamber to go through each quarterly report with Members as it is published. This is to hold the Government to account and make sure we are getting this work done in the interest of citizens and consumers throughout the country.