Dáil Éireann Debate, Tuesday - 23 January 2018
165. Deputy Charlie McConalogue asked the Minister for Finance the progress made with regard to tackling the cost of motor insurance; the steps that have been implemented to date; the future steps that will be taken in order to reduce premiums; and if he will make a statement on the matter. [2791/18]
View answerThe Deputy should note at the outset 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 motor 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.
Indeed, the problem of rising motor insurance premiums was the main impetus for the establishment of the Cost of Insurance Working Group in July 2016. Its Report on the Cost of Motor Insurance was published in January 2017. The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are set out in an Action Plan.
These recommendations were formulated to address the issue of increasing motor insurance costs, whilst taking account of 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.
Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The third such update was published on the Department's website on 23 October 2017 and shows the progress to date on the overall implementation of the recommendations.
32 actions were due for completion in the first three quarters of 2017 in total and 29 of those actions have been completed to date. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. The fourth quarterly update for 2017 is scheduled to be published within the next few weeks and will focus on the 14 actions which were due for completion in the final quarter of 2017.
I believe that the ongoing implementation of the Report on the Cost of Motor Insurance, in addition to the implementation of the Working Group's forthcoming report on employer and public liability insurance, will make a difference to the pricing of insurance premiums over the next 12 or so 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.
Finally, it should be noted that the most recent CSO data (for December 2017) indicates that private motor insurance premiums have decreased by 16.3% since peaking in July 2016. 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 levels of mid-2016.
