The Deputy should note that in my role as Minister for Finance I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on the risks they are willing to accept.
However, it is acknowledged that pricing in the non-life insurance sector has been subject to a lot of volatility in recent years, from a point where some premiums appeared to be priced at an unsustainably low level to the more recent experience of large increases.
The establishment of the Cost of Insurance Working Group (CIWG) and the publication of its Motor Report in January 2017 were a direct response to this volatility. The Report makes 33 recommendation to address the issue of increasing motor insurance costs, whilst taking account of the requirement for the need to ensure a financially stable insurance sector. This stability aspect is important, as we do not want to find ourselves in a situation again where particular firms drive prices down to a level that is unsustainable and which ultimately results in insolvency.
I believe 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.
In relation to the recommended measures yielding positive results, you should note that the most recent CSO data indicates that private motor insurance premiums have reduced by 14.3% 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 and that premiums should continue to fall from the very high level of last year.
Finally it should be noted that the work of the CIWG on business insurance, in particular employer liability and public liability is ongoing and is expected to be concluded by the end of the year.
