Tuesday, 26 November 2019

Ceisteanna (163)

Michael McGrath

Ceist:

163. Deputy Michael McGrath asked the Minister for Finance if the Central Bank monitors the number of insurance companies operating in the market; the number of insurance companies that have left the market each year since 2014, in tabular form; and if he will make a statement on the matter. [48787/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In response to the Deputy’s question, my officials contacted the Central Bank for the information requested.  The Bank informed my Department that, since the Central Bank Reform Act 2010, which amended the Central Bank Act 1942, it has no role in promoting or monitoring competition in the Irish insurance market.  However, the Central Bank was in a position to provide the number of insurance firms that have exited the market since 2014 (as notified to us under the relevant European Insurance Directives), on the basis of their historical registers.  The Central Bank has provided the following table.

Head Offices and EC Branches

Freedom to Provide Services

Year Revoked

Life

Non-life

Year Revoked

Life

Non-life

2014

2

6

2014

8

14

2015

3

8

2015

3

12

2016

1

3

2016

5

15

2017

1

4

2017

5

41

2018

4

10

2018

7

29

2019

1

11

2019

9

46

Total

12

42

Total

37

157

While the figures do not show the number of entrants into the Irish market for those years, they do suggest that there has been an increased trend for non-life companies operating on a freedom of services basis to leave the Irish market, particularly between the years 2017 and 2019. There may be a number of factors related to this, including undoubtedly smaller operators not seeking to continue to do business because of requirements to seek a new authorisation as a result of the decision of the UK to exit the EU.  However, it is also possible that the difficult financial position that a number of non-life insurers have found themselves in because of the problems being experienced from the unstable claims environment may also be a factor.  

Regardless of what these figures suggest, I believe that if we are to attract new non-life insurers to operate into the Irish market, we must continue to implement the recommendations of the Cost of Insurance Working Group (CIWG).  In particular, I believe it is important to emphasise that the single most essential challenge that must be overcome if there is to be a sustainable increase in the availability and affordability of insurance is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. In this regard, the work of the soon-to-be-established Personal Injures Guidelines Committee as part of the Judicial Council will be essential in achieving that objective. 

The first important step required by the legislation is for the Chief Justice to make the necessary appointments to the Personal Injuries Guidelines Committee. I therefore welcome last week’s announcement by Chief Justice Clarke that he has designated the seven judges that will sit on the Committee.  I understand that the designate committee will commence its activities on an informal basis shortly.  This is an important development as it demonstrates that the Judiciary is giving this matter the priority I believe it deserves.  While I appreciate that the development of a new set of personal injury award guidelines is the prerogative of the Judiciary, I believe that much work has already been done, in particular the PIC benchmarking exercise, which should assist the Judiciary in completing this work as soon as possible.  The Government is willing to provide the Judiciary with any background assistance, such as input from the Cost of Insurance Working Group, should they think that necessary.  I also understand that PIAB has written to the Judiciary to offer its expertise and assistance for the purpose of this recalibration exercise.

Finally, as I have stated before, I believe that if the issue of the level of awards in this country is addressed, that the problems facing particular businesses and community groups as a result of particular insurers either withdrawing from the market or increasing the price of insurance should recede.