Tuesday, 27 July 2021

Questions (304)

Martin Browne

Question:

304. Deputy Martin Browne asked the Minister for Finance his views on the high cost of insurance that is being asked of operators in the forestry industry. [39321/21]

View answer

Written answers (Question to Finance)

I am very conscious of the difficulties facing some sectors, including those such as the forestry sector, with regard to the affordability and availability of insurance cover. It should be noted at the outset that neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis.

The Government has nevertheless prioritised the reform of the insurance sector in order to improve the cost and availability of this key financial service, including for businesses. The Action Plan for Insurance Reform sets out 66 actions in this regard across several policy areas, including my Department, with 95% due to be completed by the end of 2021. At its most recent meeting in June, the Cabinet Sub-Group on Insurance Reform, which oversees the implementation of the Action Plan, reflected upon the considerable progress made in the first half of this year. Subsequently, the first Action Plan Implementation Report was published earlier this month which shows that 34 out of the 66 actions now completed. One of the key achievements has been the adoption of new personal injuries guidelines, which have significantly reduced awards for a range of injuries and I now expect that premiums will decline as a consequence. It is something that both I and Minister of State Fleming have stressed the necessity of in our engagements with the insurance industry over recent months.

Another significant achievement has been the creation of the new Office to Promote Competition in the Insurance Market within the Department of Finance. The role of the Office is twofold: to assist in reducing insurance costs, and increasing the availability of cover, by promoting competition in the Irish insurance market. The Office has held a number of meetings with key stakeholders to discuss important matters regarding reducing cost, consumer empowerment and increasing the provision of relevant information. Minister Fleming, who chairs the Office, will report on a regular basis to the Cabinet Sub-Group on its progress.

The Department is also working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials from both are developing a customised proposition for potential market entrants and are identifying a specific targets to engage intensively with. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market.

I would like to add that we are already seeing some indications that the insurance industry is beginning to respond positively to our reform agenda.

In conclusion, seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. In this regard, it is my firm belief that ongoing work across Government to deliver the remaining elements of the Action Plan, including measures to reform the Personal Injuries Assessment Board (PIAB), reduce fraud, and make changes to the duty of care, will help more companies to expand their product lines or enter into the Irish market. This, in turn, will lower the insurance costs for customers across all markets, including those in the forestry sector.