Dáil Éireann Debate, Thursday - 9 September 2021
212. Deputy Richard O'Donoghue asked the Minister for Finance the reason young drivers in certain counties pay extremely high insurance premiums especially the counties Limerick and Dublin; and if he will make a statement on the matter. [42854/21]
View answerAt the outset, it is important to note that neither the Minister for Finance, nor the Central Bank of Ireland, has any influence over the pricing or provision of insurance products, as this is a commercial matter assessed on a case-by-case basis. This position is reinforced by the EU legislative framework for insurance (the Solvency II Directive).
Motor insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. Factors include those such as: the drivers age, experience and number of drivers; vehicle age and type; the relevant claims record; how the vehicle is used, etc. Insurers do not all use the same combination of rating factors, and as a result prices vary across the market. Consumers are accordingly free to choose whatever product best meets their needs, with price obviously being a relevant factor. Insurance companies also price in accordance with their own past claims experience.
Notwithstanding the above, 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. It is my intention, along with Minister of State Fleming, to work to ensure that the commitments outlined in the Programme for Government are progressed in accordance with the Action Plan for Insurance Reform. As the Deputy may be aware, the Cabinet Committee Insurance Reform Sub-Group in July published the first six-monthly Implementation Report of the Action Plan. This shows that work is progressing well to implement these important reforms, with 34 of the 66 actions now completed. The Sub-Group’s focus now is on implementing the outstanding actions on time.
In relation to motor insurance prices more generally, I would note that, according to Central Statistics Office (CSO) data for July 2021, motor insurance prices are continuing to decline. Motor insurance prices in June were 34.7% lower than their peak in July 2016; and 5.7% lower than when the Government’s Cabinet Committee Sub-Group on Insurance Reform was established in September 2020. It is the Government’s intention that this positive downward trend continues as the reform agenda progresses.
I would like to assure the Deputy that work remains ongoing across Government to deliver further elements of the Action Plan, including measures to reform the Personal Injuries Assessment Board, reduce fraud, and make changes to the duty of care in order to strengthen waivers and notices. It is my hope that the implementation of these key actions in particular should further help to improve the affordability and availability of insurance for all consumers, businesses and voluntary groups – including young drivers in particular.
