At the outset, it is important to clarify that the main recommendation (recommendation 11) of the Cost of Motor Insurance Report was to establish the National Claims Information Database (NCID) on a legislative basis to facilitate a more in-depth analysis of annual trends in motor insurance claims. This was seen as key to developing an understanding of how claims costs are impacting premiums, in particular understanding the relationship between the price paid by a customer for motor insurance and the cost to insurance undertakings.
The NCID therefore will produce an annual statistical analysis of the factors related to the cost of insurance, including the underlying trends in the market such as where claims are settled, the various costs associated with the claims process etc. It is this bigger picture perspective that needs to be obtained, if we are to develop a greater clarity on how the market operates, in order to provide us with the evidence necessary for an appropriate policy response. Arising from this, the majority of information collected will be at an aggregate level only, i.e. not on a claim-by-claim basis. Some claim–by-claim level information will be collected on very large claims, but no personally identifiable information, as defined by GDPR regulations, will be collected.
It was also recommended that the Department of Finance explore the feasibility of an insurance claim-by-claim register in the longer term. This was implemented through the Department of Finance’s Report on the Feasibility of an Insurance Claim-by-Claim Register (https://assets.gov.ie/8837/e7cd3007a92546748af02a4fa51bf188.pdf). This report concluded that based on its public consultation exercise and on its own analysis that a compelling case had not been put forward for the establishment of a claim-by-claim register. It indicated that it was not possible to fully assess in detail the feasibility of such a register as no clear need or purpose has been put forward on which to base a consideration of:
- the specific data that would be required;
- the appropriateness of that data in terms of necessity, effectiveness and proportionality;
- the specific data protection and commercial sensitivity impacts;
- the logistics involved in collection, processing, access and sharing of the data, including the likely need to procure a technology services provider to administer the register; and
- whether the financial cost, which would likely be similar to that of the Central Credit Register, would be worthwhile.
In addition, an important point that the Oireachtas considered during deliberations on the NCID legislation was on the need for the database to be established in the short-to-medium term. The aggregate nature of the data collected has meant that there are fewer legal and technical complexities involved, and that is why it has been possibly to have the NCID established already. To that end, the NCID came into operation earlier this year, with the enactment and commencement of the Central Bank (National Claims Information Database) Act 2018. If we were to have gone down a claim-by-claim approach, there would be major data protection implications (GDPR would be a major factor) which would almost certainly take a long time to address and which would add to the complexity and cost of the project without necessarily providing much added value.
To conclude on this, I understand that the Central Bank has commenced collecting the required data under the NCID from insurers and I look forward to its first report later this year.