Dara Calleary
Ceist:7. Deputy Dara Calleary asked the Minister for Finance the measures that he is taking to increase competition in the Irish insurance market; and if he will make a statement on the matter. [30073/22]
Amharc ar fhreagraThursday, 16 June 2022
Ceisteanna (7)
Freagraí ó Béal (6 píosaí cainte)
Much reform has been made on the jurisprudence side of insurance costs and legal costs, yet business insurance costs continue to rise. What action is the Government taking to address this issue and to follow up whether the reduction in legal costs and awards are being passed on in the form of reduced insurance premiums? What further actions are planned?
I thank the Deputy for highlighting the issue of the insurance market in Ireland. It is a key priority for this Government and, as he will be aware, we have established a Cabinet subgroup on insurance reform, chaired by the Tánaiste. Several Departments sit on the quarterly group meeting. The Department of Finance has a key role because insurance is a regulated industry. It comes directly under the purview of that Department because the Central Bank regulates that industry.
There are three major forms of insurance in Ireland. The motor insurance market is the biggest section with approximately 2.5 million vehicles on the roads. There have been significant price reductions consistently in recent times in that sector. Every day somebody says they made a phone call when they got their premium and got a reduction. The next biggest market is home insurance. Practically every house, but not every house, in Ireland has home insurance. It is a big market and the Central Bank is introducing measures on 1 July. We have legislation to ensure that happens, which went through the Dáil in the past couple of weeks and is now going through the Seanad. That will come in and should bring about a reduction in house insurance.
The Deputy rightly pointed out that business insurance is the most difficult issue because every business is different. Cars and motorists are a fairly homogenous group. We have done much in that area in terms of competition. Until recently, there were issues relating to childcare. One company that covers that entire sector is offering an attractive package and reducing its premiums. They want competition in the sector, which will happen now it is deemed to be profitable and there is a consistency of approach. Play Activity and Leisure Ireland, PALI, a play activity centre group, is the new broker that has come, with a major new international insurance company, into the market in recent weeks and taken over the entire sector. There will always be individual sectors and a number of improvements, which I will elaborate on, are being worked on.
I thank the Minister of State. I was contacted recently by a company in my constituency in the broader hospitality industry. It was closed for much of 2020 and 2021 as a consequence of Covid, yet has had a 300% increase in insurance costs since 2019.
There has also been a considerable increase in its excess. This is in spite of the changes to judicial guidelines which, as the Minister of State rightly said, have had a big impact on motor insurance premiums. One would assume they should also have had an impact on business insurance premiums, particularly in that space. Considering the degree to which the hospitality industry was shut down and the associated low level of claims made, there should surely be reductions in that area as well. What work is under way within the Department to monitor the cost of premiums as opposed to waiting on informal feedback? There should be some system of monitoring premium costs in order that an eye is constantly being kept on whether the reductions arising from the Government's work are being passed on to the customer.
With regard to competition, I welcome the arrival of a new company in this space but the difficulty is that history shows us that a company lands, takes all the business and then, when it pulls out, we are left scrambling again. How are we going to avoid that?
There are a couple of things I want to say on that. I acknowledge the case of that business. I am happy to talk to the Deputy about that company next week. If it is closed, it is closed, but if there is anything we can do through the industry, rather than through the Department of Finance, such as putting it in touch with people who may be able to help, we will be happy to help in that way or in any other way we can.
At government level, legislation to strengthen the role of the Personal Injuries Assessment Board, PIAB, is currently in the system and legislation on the duty of care has recently been approved by Cabinet. Businesses have said that this is the single most important aspect from their point of view. Up to now, if somebody had a slip or trip in a shop, restaurant, pub or garage, the person who owned the property was nearly always on the hook for everything regardless of whether the person was negligent in respect of where he or she was walking. That legislation will come through the Oireachtas this year. There was a very positive test case in this High Court a few weeks ago that upheld the personal injury guidelines. The legal profession earns €130 million from the insurance sector and, therefore, it has a vested interest in maintaining the status quo. This case may be appealed. Even though we have done our bit, we might have to wait for some of these guidelines to be fully confirmed through the courts before price reductions are seen. I meet the chief executives of the top major companies here on an ongoing basis to ensure these reductions will come through. They have assured us that, once the guidelines have been confirmed by the courts, price reductions will come through. The Oireachtas has done its bit but we are waiting for the courts to give final approval to what has been put in place, which we hope they will.
While we wait on the courts, premiums are going up. Public liability premiums increased by 16%, according to research from the Alliance for Insurance Reform. Many businesses cannot wait given the other cost pressures they are under. Again, I ask the Minister of State whether there will be price monitoring under the new system. Can we give a role to the Competition and Consumer Protection Commission with regard to price monitoring so that people can see that premiums are coming down? I know premiums are different for every business and reflect specific business conditions but guidance should be made publicly available and there should be some system of monitoring the insurance industry to ensure it is passing on the benefits of the work done in respect of insurance reform and legal reform. Otherwise, businesses will continue to have to pay substantial increases and that is before inflationary increases are considered. There is no sense in having done all of this unless we actually get prices down. What is the timeline on the PIAB legislation?
We expect the PIAB and duty of care legislation to pass through the Oireachtas this year, although it will be after the summer. With regard to the issue the Deputy is referring to, which is the publication of independent information as to what is actually happening, we can have a very useful discussion next week. Next week, the Central Bank will publish its second ever report on employer and public liability insurance costs, claims and premiums. When we are back here in the middle of the week, we will have a report from the Central Bank, which is in a better position to do this work than the Competition and Consumer Protection Commission because it has access to the microinformation and deals with all of the major insurance companies. I have no idea whether it will be good or bad news but we will have the information next week. That will be very helpful and will provide the objective information the Deputy is looking for.