Neale Richmond
Ceist:406. Deputy Neale Richmond asked the Minister for Finance the steps that he is taking to reduce the costs of car insurance; and if he will make a statement on the matter. [30430/22]
Amharc ar fhreagraTuesday, 14 June 2022
Ceisteanna (406)
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).
Every person intending to use a vehicle on a public road must have third-party insurance cover at a minimum. Therefore, it is important that motor insurance is affordable, which is why the Government has continued to focus on reducing costs for motorists, as well as other groups, through the Action Plan for Insurance Reform .
This whole-of-Government strategy contains several initiatives expected to positively impact motor insurance costs. For example, the new Personal Injuries Guidelines have significantly lowered award levels for many common injuries, with the latest data from the Personal Injuries Assessment Board (PIAB) indicating that the overall average award has reduced by 42% compared to 2020. Consistent implementation of the Guidelines should therefore lead to a reduction in the cost of claims, including motor claims, which accounted for 70% of all awards made by the PIAB in 2020.
Another key achievement with respect to motor insurance has been the publication of new Regulations by the Central Bank to ban price walking, following its extensive review. Price walking is where customers are charged higher premiums relative to the expected costs the longer they remain with an insurance provider. I therefore welcome this imminent move, as I believe it will protect motor insurance customers who prefer to stay with their current insurer from being unfairly penalised for doing so, in terms of the premium paid.
According to data from the Central Statistics Office (CSO) for April 2022, motor insurance prices declined by nearly 15% from September 2020, when the Sub-Group on Insurance Reform, which is driving these initiatives, was established. Overall, motor insurance prices are now 40% lower than their peak in July 2016, which I believe indicates that previous reforms under the Cost of Insurance Working Group , as well as recent achievements of the Insurance Reform Action Plan, are having a positive effect. This downward trend of motor insurance prices is also validated by data from the National Claims Information Database (NCID), with the latest motor report indicating that the average earned premium per policy peaked at €708 in Q4 2017, and declined by 16% to €595 in Q4 2020. I expect that the next NCID report on private motor insurance, due later this year, will show a continued decrease in insurance prices, as the impact of the various Government reforms in this area continue to bed in and take effect.