I propose to take Questions Nos. 24 and 28 together.
The Minister for Finance is responsible for the development of the legal framework governing financial regulation. Neither he nor the Central Bank can interfere in the 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 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, particularly in relation to motor insurance.
Indeed, the problem of rising motor insurance premiums was the main impetus for the establishment of the Cost of Insurance Working Group, which I chair. Its Report on the Cost of Motor Insurance was published in January 2017 and makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out within an Action Plan. The Working Group continued its work throughout 2017 and subsequently published the Report on the Cost of Employer and Public Liability Insurance in January 2018.
Stakeholder consultation formed the foundation upon which the Working Group’s two Reports and their recommendations were developed. This consultation process undertaken by the Working Group involved a wide range of stakeholders representing the different voices within this sector, including representative bodies, the major individual motor insurance providers and interest groups. The impact of excessive premiums being charged to consumers from all counties across the country was a feature of this engagement process with industry.
In addition, my officials regularly raise specific issues affecting consumers across the country during their ongoing engagement with Insurance Ireland, including within a sub-group formed to implement relevant consumer-focused recommendations from the Motor Report.
Furthermore, I have separately met with representatives from insurance companies and other relevant stakeholders in relation to a number of issues and the problems resulting from high insurance premiums have been discussed during these engagements.
Quarterly progress updates on the implementation of the Reports provide more detailed information on the implementation of each of the recommendations and actions. The seventh quarterly update was published recently and is available on the Department’s website, within “The Cost of Insurance Working Group” sub-section of the main “Insurance” section.
Finally, it should be noted that the most recent CSO data (for October 2018) indicates that private motor insurance premiums have decreased by 22.9% since peaking in July 2016. There was a drop of 9.1% year-on-year in October, the 19th consecutive month with a year-on-year reduction.
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 mid-2016.