Dáil Éireann Debate, Tuesday - 22 May 2018
150. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that recommendation No. 12 of the report on the cost of motor insurance has been completed; if his Department will use and report on data obtained independently of an organisation (details supplied); if independent analysts have been engaged on behalf of his Department rather than on behalf of the organisation; and if he will make a statement on the matter. [22346/18]
View answerThe Deputy will be aware that the Minister of State, with special responsibility for Financial Services and Insurance, Michael D'Arcy T.D., published the second Motor Insurance Key Information Report of the Cost of Insurance Working Group (the Working Group) on 11 May 2018. The Report is the second in a series of reports designed to address Recommendation 12 of the Cost of Insurance Working Group, which aim to increase the level of transparency of the insurance sector in advance of the National Claims Information Database. The Report follows up on the first report, published in July 2017. It is likely that there will be at least one further report prior to the establishment of the National Claims Information Database.
By way of additional information on the production of these reports, a Sub-group of the Cost of Insurance Working Group, chaired by the Department of Finance, was established in January 2017 to implement this and other recommendations to improve data transparency. The Sub-group engaged extensively with Insurance Ireland who indicated that a number of the metrics identified in the Working Group’s Report were not available in a consistent fashion due to different definitions and different ways for reporting and recording data. Notwithstanding this, a data set was agreed and a data request was issued to Insurance Ireland in March 2017.
This request sought information in two tranches. The first tranche was received on 13 June 2017 and resulted in the publication of the first Motor Insurance Key Information Report in July 2017. In line with the complexity of the additional data being requested in the second tranche, it was agreed that Insurance Ireland would engage independent consultants - Verisk - to collect and compile the data in the case of this more complex data set. On 18 December 2017, a return, in the form of a report by Verisk outlining certain data and conclusions, was submitted to the Department by Insurance Ireland.
Subsequently, the Department and the Sub-group engaged with Insurance Ireland seeking some clarifications in relation to how the data and the conclusions presented were arrived at.
The Department, while accepting that the process to collate the data was rigorous, emphasises that any conclusions reached on the data are Verisk’s and have not been subject to any further actuarial analysis by it or the Central Bank, other than for clarifications. This is because, from a practical and cost perspective, the subgroup saw little to be gained from procuring a further independent actuarial analysis to verify the return, where it was satisfied that a robust process was evidenced by the detailed approach to the gathering of this data by Verisk. In addition, it should be noted that over the course of its work, the Sub-group took the view that the production of reports on a quarterly basis was not realistic in view of the complexity of the data exercise.
To conclude, while the recommendation is seen primarily as an interim step that increases the level of transparency in advance of the establishment of the National Claims Information Database, I believe that the series of reports are an important foundation stone as they have helped prepare industry for the new database. In addition, in view of the challenges in collating and analysing aggregate level data across the insurance sector in Ireland, this exercise strongly demonstrates the value and need for the National Claims Information Database.
