Dáil Éireann Debate, Tuesday - 27 March 2018
63. Deputy Bobby Aylward asked the Minister for Finance the status of the implementation of the recommendations made in the report by his Department's working group on reducing the cost of motor insurance; the number of recommendations that have not been implemented to date; the reason for same; and if he will make a statement on the matter. [13924/18]
Amharc ar fhreagraThe cost of insurance working group’s report on the cost of motor insurance was published in January 2017 and makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are set out in an action plan.
In line with the commitment to publish quarterly update reports on the implementation of the recommendations, the working group has published four update reports to date, most recently on 20 February last. This report shows that of the 46 separate deadlines set during 2017 in the action plan, 39 have been met. Substantial work has also been undertaken in respect of the nine action points categorised as "ongoing".
In respect of the seven actions which were not fully completed in 2017 as scheduled, three relate to legislation issues while another requires further discussion, and subsequent final agreement, between the Department and Insurance Ireland. Another outstanding action is contingent on the establishment of the new office of the legal costs adjudicators, which currently is expected to occur by July 2018. The remaining two actions both relate to recommendation No. 26, which requires the approval of both the Minister for Justice and Equality and the Garda Commissioner for potentially far reaching co-operative mechanisms between Insurance Ireland and An Garda Síochána to be formalised and is still under consideration.
Significant progress has been made in respect of the implementation of all seven of the aforementioned actions, particularly regarding the establishment of a new national claims information database. Overall, a considerable amount of work has been undertaken to address the issue of the cost of motor insurance by implementing the recommendations in the report.
It should be noted that the average cost of motor insurance has been consistently falling since the middle of 2016. The ongoing implementation of the motor report recommendations is contributing to this trend. The most recent CSO data show that the reduction is 18.1% since July 2016.
I do not believe we should understate the importance of the rising cost of motor insurance. I will support any measures that are brought forward to help reduce the cost of motor insurance for young people, taxi drivers, hauliers and all those working in industries affected by this issue. However, the measures brought forward by the Government are not having a quick enough impact. I do not say this lightly. I say it because that is what I hear regularly from our young people, taxi drivers, road hauliers and people in many other sectors of society. They become disillusioned when they learn their premiums are being increased by 15% with no meaningful reason given for such a rise. Older people, in particular, who have never had a claim against them and have never had penalty points on their licences are very aggrieved, and rightly so. I do not know where the Minister of State is getting his figures for the reduction because everybody I speak to says the premiums are going up. Nobody has told me that their premiums are going down on an annual basis.
For over 12 months Fianna Fáil has been calling for action on the rising cost of motor insurance. In 2014, motor insurance increased by 11.6% and in 2015 it increased by almost 30%. In the 12 months since December 2016, private motor insurance increased by 12%. These are staggering figures.
They are not my figures but independent figures from the CSO. They are not from the Department or Insurance Ireland. They are independently assessed by the CSO. The Deputy should not mistake what he calls the lack of speed. We are not underestimating the importance of this issue. To demonstrate its importance, there are four legislative measures from the Department of Finance, three legislative measures need to be changed by the Department of Justice and Equality and there is also legislation to be changed by the Department of Business, Enterprise and Innovation and the Department of Transport, Tourism and Sport. There is much work to be done. If any Member of the House, committee or group is prepared to make time available for these legislative changes, I would be delighted to hear it. We have nine legislative measures that will eventually have the overall impact. It is the cumulative effect of all these changes that will have the impact, not just one or two changes.
All I can speak about is the experience. Small and medium-sized enterprises, SMEs, say the insurance is killing them and its cost is increasing all the time. I do not know where the percentage reductions mentioned by the Minister of State are, because that is not the reality. I can give another example involving a member of my family. He is a young fellow who did the theory test, passed it, had 12 driving lessons and passed his second driving test after failing the first. When he looked for insurance quotations they were for thousands of euro. The insurance actually cost more than a car. When his father and mother tried to put him on their insurance as a named driver, they were quoted €2,000 and €3,000. I even tried to put him on my insurance for my commercial farming vehicle at home with my insurance company. It quoted €900 for eight months. That is extravagant. No young person will ever get on the insurance ladder unless we do something, and this is the place to do something to try to reduce the cost of insurance.
With regard to younger drivers, I said in the House previously that there is an opportunity for young drivers to use a telematics device which can record the movement of their vehicles. To my disappointment a huge number of young drivers prefer to pay the extra amount rather than be on the system where their every movement is recorded in an appropriate way. I believe that in the future all young drivers should use these devices so we can ensure they start with good driving practices rather than bad ones. There are insurance companies-----
What is the cost of these devices?
The cost of insurance will be halved for a young driver if he or she uses this device. However, very few people are taking it up.
