Thursday, 25 October 2018

Ceisteanna (28)

Robert Troy


28. Deputy Robert Troy asked the Minister for Finance his views on spiralling costs in the motor vehicle insurance industry and the negative impacts this is having on commercial and personal users of motor vehicles; and the steps he will take to address this. [38003/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Deputy should note at the outset that in my role as Minister for Finance I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature and are determined by insurance companies based on the risks they are willing to accept.

I acknowledge that motor insurance costs have spiralled over the last number of years. This volatility in pricing in fact was the main impetus for the establishment of the Cost of Insurance Working Group. Its Report on the Cost of Motor Insurance was published in 2017 and makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out within an Action Plan. There is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The sixth such update was published on August 30th . It shows that of the 56 separate applicable deadlines within the Action Plan set to the end of Q2 2018, 44 relate to actions which have been completed. The seventh update will be published in the coming weeks.

I believe that the above work is having the desired impact on pricing. In this regard, it should be pointed out that the most recent CSO/CPI data (for September 2018) indicates that private motor insurance premiums have decreased by 21.5% since peaking in July 2016. There was a drop of 7.9% year-on-year in September 2018, the 18th consecutive month with a year-on-year reduction. I appreciate that these figures represent a broad average but I think it has to be recognised that the overall trend in the price of premiums currently is downward, which is welcome. Nevertheless, I am of course aware that some private and commercial drivers may still be seeing increases, and accept that more work needs to be done.

In conclusion, I am hopeful that with the continuing implementation of the recommendations of the Cost of Insurance Working Group, there will be a further positive impact on pricing over the next 12 months or so.