At the outset it should be noted that neither I, as Minister for Finance, nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct insurance companies as to how they price their policies or what terms and conditions they apply in those policies.
On a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. For example, in relation to commercial van insurance, including for couriers, factors may include those such as the age of the driver and their relevant driving experience, as well as the age and type of vehicle, how and where it is used, the claims record, the number of drivers, and the storage and use of the vehicle. Insurers also price in accordance with their own past claims experience, and do not all use the same combination of rating factors, so as a result prices vary across the market. While I cannot comment on the specific case referenced in the details supplied, a number of these factors may be influencing the ability of the individual courier to secure insurance at a lower price.
The above said however, it is my understanding that there are a number of brokers and insurers still offering courier van insurance. Consequently, my view is that it is now more important than ever for those operating in this sector to shop around for their insurance policies. In this regard, the Competition and Consumer Protection Commission (CCPC), on its website, recommends that consumers get quotes from a number of insurance companies, including their current one.
With regard to steps taken by Government to create a more competitive environment in relation to insurance generally, I believe that the Cost of Insurance Working Group (CIWG) has done considerable work to reform the insurance market so as to stabilise pricing and availability of insurance. The impact of this can be seen in particular in relation to private motor insurance, however I accept that more needs to be done in some key areas such as the personal injuries legal environment. In this regard, the Deputy may recall the Personal Injuries Commission’s conclusions that soft tissue injuries are significantly higher here than in England and Wales (4.4 times) and recommended that action be taken to address this disparity through the establishment of the Judicial Council. I believe that the discrepancy in award levels is unsustainable and that these should be reduced considerably. Completion of those recommendations related to the Judicial Council and Law Reform Commission (LRC) is therefore vital if we want to attract more insurers into the Irish market.
By way of update to the Deputy, I understand that the relevant Personal Injuries Guidelines Committee (PIGC), within the Judicial Council, was established on 28 April and is due to submit its first draft Personal Injuries Guidelines to the Council within six months, as per the requirements of the legislation. While the Government cannot interfere in the Judicial Council’s deliberations due to the constitutional separation of powers, I would hope that the Guidelines will take into account the Personal Injury Commission’s benchmarking report, and can come into operation as soon as possible following their submission to the Judicial Council. In return for lower and more consistent award levels, I believe insurers have to significantly reduce their premium levels and broaden their risk horizons.
Finally, I would like to assure the Deputy that the Cost of Insurance Working Group is continuing to focus on implementing the recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance. The cumulative effects of the completion of the two Reports’ recommendations should include increased stability in the pricing of insurance for small businesses, like the one referenced, and a more competitive insurance market.