Dáil Éireann Debate, Thursday - 16 June 2022
59. Deputy Seán Haughey asked the Minister for Finance if he will provide an update on the work that he has undertaken to bring down the cost of insurance for motorists, homeowners and businesses; and if he will make a statement on the matter. [29753/22]
Amharc ar fhreagraAt 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).
Notwithstanding this, the Programme for Government recognises that insurance costs are a significant issue for businesses, motorists, and households, as well as a range of sporting, community, and voluntary groups. We therefore established the Sub-Group for Insurance Reform to prioritise further action in this area, with a focus on reducing insurance costs, and increasing the availability of cover. Furthermore, the Insurance (Miscellaneous Provisions) Bill 2022, which is a pro-consumer piece of legislation that will enhance transparency in several areas, should be finalised in the Oireachtas in the coming weeks.
This reform work is being driven through the Action Plan for Insurance Reform, which sets out 66 actions across several policy areas, including the Department of Finance. According to the second Action Plan Implementation Report published in March this year, this reform agenda is progressing well, with some 80% of actions being delivered, and the remaining ongoing to completion.
Some of the key achievements to date aimed at reducing costs include:
- the implementation of the Personal Injuries Guidelines, which have significantly lowered award levels for many common injuries;
- the Central Bank’s forthcoming ban on price walking for home and motor insurance, which will end the “loyalty penalty” imposed on some long-term customers;
- the establishment of the Office to Promote Competition in the Insurance Market , which aims to lower costs by promoting greater competition in the Irish market;
- the development of legislative proposals to reform the Personal Injuries Assessment Board (PIAB), with a view to increasing the number of claims settled by the Board without recourse to litigation; and
- measures to reduce fraud, including the enactment of the Criminal Justice (Perjury and Related Offences) Act 2021, which places perjury on a statutory footing for the first time.
My Department has regular engagements with industry and stakeholders in relation to implementing this suite of reform measures.
I believe that the annual decline of 10.9% in motor insurance prices, as evidenced by recent Central Statistics Office data, indicates that the Action Plan initiatives are having a positive policy outcomes for consumers.
The Central Banks’ National Claims Information Database (NCID) last motor report indicates that the average earned premium per policy peaked at €708 in Q4 2017, and declined by 16% to €595 in Q4 2020.
With respect to insurance for businesses, the first NCID Report on Employers’ Liability, Public Liability and Commercial Property indicates that many businesses are accessing affordable insurance. According to the Report, in 2019, the average premium for package policies was €2,269, and 93% of all policies had a premium of less than €5,000.
Over time, the NCID should allow us to assess the cumulative impact of the reform package across motor, employers’ liability, and public liability insurance, and I look forward to the publication of this year’s reports in due course.
