Dáil Éireann Debate, Thursday - 1 February 2024
227. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the insurance industry here remains competitive when compared with insurance costs throughout the European Union notwithstanding any national difference that may apply; and if he will make a statement on the matter. [4866/24]
View answerImproving the competitiveness of the domestic insurance market is a key priority for Government and was included in the Programme for Government. Accordingly, the Office to Promote Competition in the Insurance Market (OPCIM) was established in December 2020, and is currently chaired by Minister of State Carroll MacNeill.
The OPCIM has had success in engaging with new entrants to the Irish market, some of which have launched in the last year and others will do so in the coming months. Furthermore, in a recent round of meetings with Minister of State Carroll MacNeill, many incumbent providers indicated that they were expanding into new areas in response to recent Government reforms aimed at improving the insurance environment. Indeed, major international insurers have indicated that they are impressed with the pace and scale of our reforms to date and point to Ireland as a positive example of Government action in this complex policy area.
The OPCIM also has an important role in connecting various stakeholders – insurers, brokers, representative groups, among others – and facilitating engagement on issues relating to the availability of insurance across the market. This has, in many cases, helped resolve some pinch-points within the Solvency II insurance framework within which we must operate. In addition, we have seen multiple insurers offer quotes for some of these former pinch-points at renewal, indicating a positive improvement in the competitive environment over time.
In relation to other European Union member states, it is my understanding that it is difficult to obtain reliable comparative data on the cost of insurance. I am informed that international organisations, such as the OECD and Eurostat, do not publish such information. Eurostat publishes Harmonised Index of Consumer Prices (HICP) data with regard to insurance, but this only provides a comparison of the rate of inflation for different types of insurance such as motor, home and travel. Accordingly, it is not possible to compare the underlying cost of each insurance type. In addition, this does not include a comparative index for the price of business insurance. In any event, while a single market for insurance does exist across the EU, any international comparison based on price alone would not take into account relevant market-specific factors such as the various regulatory environments and liability systems in place in different jurisdictions, which have a major impact.
However, increased availability of data in relation to insurance, and understanding of the factors that influence insurance costs, is important. In this regard, the National Claims Information Database (NCID) is unique in Europe in terms of the transparency it provides into the Irish insurance sector. To date, the Central Bank has published NCID reports on private motor insurance and employers’ liability, public liability and commercial property insurance. These contain a wealth of information regarding the key insurance markets for consumers and businesses, including data on claims costs and average earned premiums.
The NCID is continually enhancing the transparency and insight that can be provided through these reports, and the data collection has been amended to include more information over time. As such, I believe that it will continue to serve a vital role in helping us to understand the impact of market developments on insurance costs into the future. In addition, the NCID should also enable stakeholders to assess the impact of the wide range of Government reforms already undertaken to improve the affordability of insurance, and will enable us to better tailor any future measures to increase the competitiveness of this key sector.
