Dáil Éireann Debate, Tuesday - 21 June 2016
109. Deputy Mary Lou McDonald asked the Minister for Finance his plans to tackle the extraordinary hike in car insurance premiums following the Private Members' business motion on this issue last week. [17002/16]
View answerDiffering reasons have been put forward by various interested parties to explain Ireland's current increasing insurance costs. Motor insurance appears to be particularly affected with the cost of premiums increasing significantly in the past 12 months. In fact, there are a number of factors that drive the cost of insurance.
Reasons often presented include the increased level of insurance claims and the increasing value of compensation awards. Others highlight that the highly competitive nature of the domestic market for non-life insurance in recent years has begun to impact on firms' underwriting profitability with underwriting losses reported in 2014 for a number of high-impact firms.
To examine these issues in more detail and to assess what the options are for the Government, I have established a task force in my Department to undertake a Review of Policy in the Insurance Sector. The first phase of the work of the task force, which began in January 2016, is a review of the Framework for Motor Insurance Compensation. This is being carried out jointly with the Department of Transport, Tourism and Sport. This review also deals with broader issues around the Insurance Compensation Fund and its report will be submitted shortly to me and my colleague, the Minister for Transport, Tourism and Sport.
The broader work of the task force includes an examination of the issues debated during the Dáil Private Member's Motion of the 8th and 9th of June. The work is being undertaken in consultation with the Central Bank of Ireland, other Government Departments, Agencies and interested bodies. The aim of the review is to identify the factors contributing to the increasing costs of insurance, and to recommended measures to improve the functioning and regulation of the insurance sector in Ireland, identifying the issues that can be addressed on a more immediate basis and those that need more long-term policy implementation.
This work will be completed over the coming months.
