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Insurance Industry

Dáil Éireann Debate, Thursday - 28 April 2022

Thursday, 28 April 2022

Ceisteanna (13)

John Lahart

Ceist:

13. Deputy John Lahart asked the Minister for Finance if motor insurance premiums are decreasing; and if he will make a statement on the matter. [20548/22]

Amharc ar fhreagra

Freagraí scríofa

At the outset, it is important to note that neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.

Motor insurance is the one insurance product that is mandatory, in that every person intending to use a vehicle on a public road must have third-party cover at a minimum. Therefore, it is important that motor insurance is affordable. In that regard, I am pleased to note that data from both the Central Statistics Office (CSO) and National Claims Information Database (NCID) show that prices are falling for private motor insurance.

CSO Consumer Price Index (CPI) data indicates that the price of motor insurance peaked in July 2016 and has since fallen 40 per cent to March 2022, including a decline of 12.1 per cent in the past year. For comparison, the CPI as a whole increased by 6.7 per cent in the same period. The most recent NCID data indicates that the average earned premium per policy peaked at €708 in Q4 2017 and declined 16% to €595 in Q4 2020. I expect that the next NCID report on private motor insurance, due later this year, will show continued decrease in insurance prices.

While the two datasets, from CSO and the Central Bank, should not be compared as ‘like with like’ due to different methodologies used to produce them, both show a similar trend of falling motor insurance premiums in recent years. This is a welcome development taking account of the Government's significant reform agenda that we are implementing through our Insurance Action Plan.

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