Thursday, 31 January 2019

Ceisteanna (6)

Maurice Quinlivan


6. Deputy Maurice Quinlivan asked the Minister for Business, Enterprise and Innovation the steps she has taken to date and the action planned to tackle the high cost of insurance for businesses; the discussions she has held with the Minister for Finance regarding the problem for businesses; and if she will make a statement on the matter. [4674/19]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte) (Ceist ar Business)

What new steps has the Department of Business, Enterprise and Innovation taken so far to address high insurance costs? What actions are planned to help businesses deal with the great costs and what discussions has the Minister of State had with the Minister for Finance, Deputy Donohoe, about the challenges facing businesses in this area? The Minister of State will be well aware of the Alliance for Insurance Reform. It has been highlighting a number of cases in recent weeks. This is an ongoing crisis that needs to be tackled.

My Department is very aware of the serious impacts on businesses and consumers of high insurance costs. It is important that consumers and businesses can obtain insurance cover at a reasonable and fair price. The cost of insurance working group, chaired by my colleague, the Minister of State, Deputy D’Arcy, has undertaken a review of the factors influencing the increased cost of insurance. Its objective is to identify immediate and long-term measures which can address increasing costs, while bearing in mind the need to maintain a stable insurance sector. The first phase of this work involved an examination of the motor insurance sector. The second phase involved an examination of the employer liability insurance and public liability insurance sectors.

The work of the cost of insurance working group is complemented by the work of the Personal Injuries Commission, PIC. My Department submitted the second and final report of the PIC to Government on 18 September 2018. The publication of that report concluded the challenging work programme of the commission since its establishment in January 2017, on foot of a recommendation in the working group's motor insurance report. The PIC has made a total of 14 recommendations in its two reports. Those are aimed at impacting positively on the insurance claims environment.

One of the key recommendations in the PIC's second and final report is that the judicial council, when established under the Judicial Council Bill 2017, be requested by the Minister for Justice and Equality to compile judicial guidelines for appropriate general damages for various types of personal injury. Following publication of its final report, my Department wrote to relevant Government colleagues, including the Ministers for Justice and Equality and Health and other organisations including the Garda Commissioner, Insurance Ireland and the Law Society.

As I said, insurance costs are a major issue for businesses across the country. I do not believe, and most of those businesses tell me they do not believe, that the Government is grasping the situation with the urgency needed. People are paying scandalous amounts for premiums that have no correlation whatsoever to their claims or costs. Information I recently received from the Competition and Consumer Protection Commission, CCPC, shows that it received more than 1,200 complaints about motor insurance last year alone.

Insurance costs are impacting on both employees and their employers. I appreciate there has been some movement on the problem of fraudulent claims, and this is welcome. Fraudulent claims alone, however, are not the cause of large premiums. I am afraid this argument is now providing the insurance industry with a scapegoat as to why it is increasing premiums. The industry needs to be challenged on its behaviour and this is clearly not happening. The lack of transparency is astonishing, with businesses left bewildered at the premiums they are quoted. There is no explanation for that whatsoever. Are there plans to address this point, force these companies to be more transparent and ensure consumers are not ripped off by insurers?

In my initial response, I did not get the opportunity to state that the other groups we met included the Bar Council of Ireland and the Law Reform Commission. We were seeking the co-operation of all of those groups in advancing the implementation of the recommendations in the report that are relevant to them. My officials have met the Minister of State, Deputy D’Arcy, and other stakeholders to discuss the high cost of insurance for business and consumers and the work of my Department in this regard. The cumulative effects of the implementation of all the recommendations from the two reports of the PIC, alongside the reports of the cost of insurance working group and the measures contained in the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018, will bring greater consistency and predictability to awards, faster resolution of claims and, ultimately, a reduction in insurance premiums. If we can get to that stage, and if we deal with those issues, that will bring down the cost of insurance and benefit consumers, businesses and society as a whole.

I thank the Minister of State for his response. In fairness, I appreciate what he said but people listening to this, or contacting our offices, whether car owners, business owners or community groups that have to cancel many of their events, do not see that this issue is being dealt with as a matter of urgency.

It has to be dealt with as a matter of urgency. Younger people, especially in rural Ireland, are unable to afford insurance, so they cannot drive, get on the road and get work. It is affecting community groups, and there are massive increases coming in that area. The insurance companies hide behind the issue of claims to increase their premiums, which has no correlation whatsoever with the number of claims being made and the increases to which they are being exposed. Many people say they will not make claims because it will increase the price of their premium once the claim is lodged. They often do not know that a claim has been lodged against them until they go to renew their insurance.

The ball is in the Minister of State's court. He has to reassure businesses that he will act on this.

The cost of insurance working group is undertaking a review of all factors influencing the increased cost of insurance. We have met that group on a number of occasions. Its objective is to identify immediate and long-term measures to address increasing costs, bearing in mind the need to maintain a stable insurance sector in the community. Everybody in government believes that we need to do something about the high cost of insurance. The 14 recommendations in the two reports I have mentioned will deal with that over time. There is no quick-fix available for this issue. The senior Minister and I cannot stand up in the House and say that we will bring down the cost of insurance within two or three months. However, I believe that the recommendations in the two reports, the input of the various Departments that are dealing with this, and the second phase of the report of the PIC, when implemented, will mean that, in the medium term, insurance companies will have no choice but to bring down the cost of insurance.