Dáil Éireann Debate, Tuesday - 13 October 2020
99. Deputy Emer Higgins asked the Minister for Finance the steps he will take to address the increasingly high cost of motor insurance, in particular for young drivers and drivers of vehicles such as caddies; and if he will make a statement on the matter. [29899/20]
View answerAt the outset, while I have an appreciation of the specific issue the Deputy raises, neither I, nor the Central Bank of Ireland, can direct the pricing of insurance products, as this is a commercial matter, nor can we compel any insurer operating in the Irish market to provide cover. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.
On a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer motor insurance cover and what terms to apply. For example, factors may include the drivers age; relevant driving experience; the age and type of vehicle; how and where the vehicle is used; the claims record; the number of drivers; and the storage location. Insurers also price in accordance with their specific claims experience and do not use the same combination of rating factors. Accordingly, premium prices vary across the market, demonstrating why it is important for consumers to shop around on their insurance policies.
As the Deputy will appreciate, there is no single policy or legislative fix to remedy the cost and availability of insurance issue. The Programme for Government identifies a range of issues that the Government will prioritise through the recently established Cabinet Committee on Economic Recovery and Investment’s Sub-Group on Insurance Reform . This sub-Group held its inaugural meeting on 30 September and identified a number of key deliverables to be progressed before the end of 2020. The Sub-Group is chaired by the Tánaiste, and also includes as standing members, myself, Ministers McGrath, McEntee, and O’Gorman, together with Ministers of State Troy and Fleming. I believe that this approach provides the best opportunity to address the cost and availability of insurance on a cross-Departmental basis. This will build and expand upon the previous commendable work done by the Cost of Insurance Working Group. As you will be aware, a number of important reforms have already taken place, and the impact of these is reflected in the recent CSO data which indicate that the cost of private motor insurance is now almost a third cheaper than at its peak in July 2016.
In terms of addressing the affordability and accessibility of insurance generally, a necessary step is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. The establishment of the Judicial Council last December is very important in this regard, and it is expected that the Personal Injuries Guidelines Committee will submit draft Guidelines to the Judicial Council before the end of the year. It is desirable that the Guidelines could play a role in the lowering of award levels and also could lead to a more consistent application of making awards in courts. Insurance Ireland, the representative body for insurance providers in this country, has indicated that if award levels come down so will premiums charged by its members. I believe that this is a very important statement and this Government intends holding the insurance industry to this commitment.
Finally, I think it is also worth mentioning that Insurance Ireland operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at: feedback@insuranceireland.eu.
