The Cost of Insurance Working Group – which is now chaired by Minister of State Mr. Michael D’Arcy T.D. – finalised its report on the Cost of Motor Insurance in December 2016 and it was published on 10 January 2017. The report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out in an action plan within the report.
The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, conducted its own review of the rising cost of motor insurance and published its report in November 2016.
I am of the view that considerable overlaps exist between the two reports. Therefore in implementing the recommendations of the report on the Cost of Motor Insurance, the Government has been addressing many of the recommendations contained in the Joint Committee's Report, including in such key areas as:
- Consumer protection – e.g., providing breakdown of the calculation/increase in premiums, improving conditions for returning emigrants, etc;
- Enhancing transparency in the claims environment – e.g., establishing a National Claims Information Database, improving the quality of data in the Book of Quantum, etc.;
- Counteracting uninsured driving and fraud – e.g., establishing fully-functional databases in respect of uninsured drivers and insurance fraud, expediting the development of the Master Licence Record, etc.
Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report on the Cost of Motor Insurance that the Working Group will prepare quarterly updates on its progress. The second such update was published on the Department’s website on 21 July 2017 and shows the progress to date on the overall implementation of the recommendations, with a particular focus on the 17 action points which were due for completion in the second quarter of 2017. All 17 of these action points have been completed by this deadline. In total, all but one of the 27 action points due in the first two quarters of the year have been completed. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. The third quarterly update will issue in the coming weeks.
I believe that the continued implementation of the Report on the Cost of Motor Insurance will make a difference to the pricing of insurance premiums over the next 12-18 months. It is envisaged that the implementation of all the recommendations cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, will achieve the objective of delivering fairer premiums for consumers. I also believe that the Setanta judgment, by finding that MIBI is not liable to meet third-party claims, removes a major uncertainty from industry, which I would expect to be reflected in pricing in the short to medium term.
In this regard, it should be noted that the most recent CSO data (for August) indicates that private motor insurance premiums have reduced by 14% year-on-year. While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases. However, I am hopeful that this greater stability in pricing will be maintained with the result that premiums should continue to fall from the very high levels of last year.
