Dáil Éireann Debate, Thursday - 14 July 2022
286. Deputy Ruairí Ó Murchú asked the Minister for Finance the measures that the Government plans to take to ensure that changes in the judicial guidelines on personal injury claims result in reduced premiums for insurance customers; and if he will make a statement on the matter. [39164/22]
View answerAs the Deputy will appreciate, 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. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive).
Nevertheless, this Government is continuing to prioritise insurance reform through the whole-of-Government Action Plan for Insurance Reform. The Personal Injuries Guidelines represent a key achievement of this reform agenda, with recent data from the Personal Injuries Assessment Board indicating that the overall average award has fallen by 42 per cent compared to awards made in 2020 under the Book of Quantum. Given this pace of reform, and the many other measures being implemented, it is necessary for the insurance industry to pass on benefits to its hard-pressed customers. Both Minister of State Fleming and I have been clear on these points and have been holding the insurance sector to account, in so far as it is permissible, on commitments made.
In this regard, Minister of State Fleming has met individually with the CEOs of the eight main insurers in the Irish market on a number of occasions since the adoption of the Guidelines. In these meetings, and in ongoing engagement with industry, Minister of State Fleming has consistently stressed the importance of insurers reflecting lower claims costs through reduced premiums. These engagements have been positive, with insurers confirming their commitment to passing on savings from the Guidelines. During these meetings, it was also impressed upon insurers the need to expand their risk appetite into ‘pinch-point’ sectors that are experiencing issues with availability and affordability of cover.
In addition, the National Claims Information Database (NCID) contains a wealth of information on premium prices and claims costs, and is unique in Europe in terms of the transparency it brings to the insurance sector. Following the introduction of the Guidelines, the Central Bank has amended the NCID data specification and will collect further claim settlement data. I look forward to the publication of the fourth Private Motor Report later this year, which will provide data up to the end of 2021, and should show some initial insight into the impact of the Guidelines.
Finally, it is important to note that it will take time for the Guidelines to take effect, particularly in terms of Court settlements, as there are still a number of existing claims before the Courts which will be assessed under the Book of Quantum. In addition, buy-in from all stakeholders is vital if the Guidelines are to have the expected effect, and it will take a period of time for their true impact to be felt. In the meantime, the Government will continue to engage with stakeholders in relation to their use, as well as with the Central Bank with regards to enhancing the NCID to monitor their impact.
