Dáil Éireann Debate, Thursday - 13 February 2025
39. Deputy Pearse Doherty asked the Minister for Finance if he is aware of the increasing prevalence of rising motor insurance costs on renewal despite no change in circumstances; and if he will make a statement on the matter. [5090/25]
View answerFirstly, I wish to reassure the Deputy that I recognise the concerns felt by many consumers and businesses across various sectors around the cost and availability of insurance cover.
As the Deputy is aware, neither I nor the Central Bank of Ireland can interfere with the provision or pricing of insurance products due to the EU Solvency II Directive. However, I wish to highlight the Government’s continued commitment in the new Programme For Government - Securing Ireland’s Future to publish a new Action Plan for Insurance Reform focused on encouraging further competition in the market and working with stakeholders to enhance transparency and affordability across all types of insurance. This will build on the significant progress made under the previous action plan.
According to Central Statistics Office data, in the year to December 2024, motor insurance prices in Ireland increased by 11.4 percent on average. In comparison, the average price rise in the EU for the same period was 13.1 percent. This recent rise is after a long period of sustained price reductions, and it is important to stress that prices remain 35.5 percent lower than their peak in July 2016.
Internationally, the last few years has seen the emergence of inflationary pressures in motor insurance. This rise is driven by a combination of external factors, including increased vehicle technology, supply chain disruptions and a tightening labour market, which have raised the cost of repairs. Recent reforms have helped shield the Irish insurance industry from the worst impacts of the externally driven inflation and competitiveness pressures.
While motor insurance costs have begun to increase here, when comparing to other regions, Ireland has seen significantly better outcomes. Minister of State Troy has recently begun a round of intensive engagement with key stakeholders including Insurance Ireland and the main insurers in the Irish market to set out the Government’s expectation that savings arising from the reform agenda will be reflected via reduced premiums, as well as increased availability of cover.
In conclusion, I will continue to work with Minister of State Troy and my colleagues in Government to ensure that the new Action Plan for Insurance Reform, once developed, will continue to deliver reform in the insurance sector and tangible benefits for insurance consumers across Ireland.
