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Insurance Industry

Dáil Éireann Debate, Tuesday - 21 September 2021

Tuesday, 21 September 2021

Questions (32, 49, 74)

Alan Dillon

Question:

32. Deputy Alan Dillon asked the Minister for Finance the engagement he has undertaken with insurance companies to drive down the cost of insurance premia for consumers; and if he will make a statement on the matter. [44856/21]

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Brendan Smith

Question:

49. Deputy Brendan Smith asked the Minister for Finance the actions he is taking to reduce insurance costs. [44785/21]

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Ruairí Ó Murchú

Question:

74. Deputy Ruairí Ó Murchú asked the Minister for Finance the details of the recent engagements he has had with insurance underwriters in order to bring more into the market; the further progress made in relation to the Action Plan for Insurance Reform Implementation Report; and if he will make a statement on the matter. [44778/21]

View answer

Written answers

I propose to take Questions Nos. 32, 49 and 74 together.

As committed to in the 2020 Programme for Government, Government is prioritising reform of the insurance sector with particular emphasis on motor, public liability, and employer liability insurance. The whole-of-Government approach being taken through the Action Plan for Insurance Reform therefore sets out 66 actions which aim to improve both the cost and availability of this key financial service, particularly for businesses. As the Deputy may be aware, the Cabinet Committee Insurance Reform Sub-Group earlier this month 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.

One of the key achievements in the first half of this year under the Action Plan was the implementation of the Personal Injuries Guidelines , which represents a key achievement of this insurance reform agenda, and was realised several months ahead of schedule. These significantly reduce award levels for many categories of common injuries, particularly those of soft tissue. Of note is that a number of common injuries will now move to the jurisdiction of the District rather than the Circuit Court, thus reducing associated legal fees. The Guidelines also provide guidance in relation to injuries previously not included in the Book of Quantum and will be used by both the Personal Injuries Assessment Board (PIAB) and the judiciary. Therefore, they should help to bring more certainty to claimants and insurers, and as such reinforce the benefits of using the PIAB to settle claims. This in turn should further reduce the costs of claims, particularly legal fees. I have previously set out my view that these costs, rather than the profit component, tend to represent a bigger factor in the cost of insurance premiums. As such, it is important that they are lowered.

As Minister for Finance, my expectation is that insurers will now commence reflecting savings from reduced award levels to customers, in line with past commitments, and both I and Minister of State Fleming are holding them to account on this. In that regard, Minister of State Fleming met with the CEOs of the main insurers operating in Ireland to set out the Government’s expectation in this regard. These engagements were positive, with insurers indicating that they will begin lowering premiums in response to the Guidelines. The Minister of State will meet with CEOs again later this year to review their ongoing response to this and other key reforms.

Another significant achievement of the reform agenda is the establishment of the Office to Promote Competition in the Insurance Market within the Department of Finance. The role of the Office, which is chaired by Minister of State Fleming, is twofold: to assist in reducing insurance costs and to increase the availability of cover, by promoting competition in the Irish insurance market. The Office has held a number of meetings with several key stakeholders, including insurance providers, representative bodies and other civic society groups, to understand gaps in the Irish insurance market. Its aim is to expand the risk appetite of existing insurers and explore opportunities for new market entrants in order to increase the availability of insurance, including specialised cover such as professional indemnity insurance.

Accordingly, the Department is also working closely with IDA Ireland 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 target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market.

Finally, 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 PIAB, 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 have a positive impact on the affordability and availability of insurance for individuals, businesses, community and voluntary groups across Ireland.

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