John Lahart (Dublin South West, Fianna Fail) | Oireachtas source

I thank the Chairman for prioritising the issue of rising motor insurance premiums within the finance committee and thank the Minister of State, Deputy Eoghan Murphy, for his attendance. While I do not question the Minister of State's personal or political bona fides on this issue, as he is aware it has been highlighted for nearly two years. It was highlighted by my colleague, Deputy Michael McGrath, and in the media by the journalist, Charlie Weston. Consequently, in one sense it is disheartening that the committee and subgroups are only now being set up and have only met once or twice, with a second meeting only four or five days ago and that the subgroups have not begun to meet.

I refer to the reality on the ground, and with the permission of the Chair, I believe it is important to introduce one or two brief case studies, if that is all right. I am thinking of two constituents, the first of whom was responded to by his insurer to the effect that he did not meet its insurance criteria as he had had an accident within the past five years. The insurer stated that once a claim had been made within a five-year period, it was unable to offer cover. That person is faced with being put off the road and one point he highlighted was that, to use his own words, he barely scraped a car and the insurance company settled for €1,600 without his knowledge. This is a point Fianna Fáil has highlighted in its policy document. His car has passed the national car test, NCT, is five or six years old and has a value of approximately €10,000. He had a no-claims bonus until that accident, as well as step-back cover etc.

That case involved a middle-aged man, while the other case involved an older man, who is well into his 70s with a 14 or 15 year old car, whose premium has increased from just over €400 to more than €1,300. He is a pensioner in receipt of €230 per week who simply has been put off the road. Again, the car in question had passed the NCT and this driver's mileage is approximately 2,000 km per year and such modest driving had prevented him from being obliged to use public transport. One issue, which the Minister of State mentioned in his statement, is the relationship between the NCT to the cost of insurance. What is the point of having one's car tested if it has no bearing on the cost of one's insurance?

While I wish to introduce a couple of points, the Minister of State by and large has outlined a fair amount of the analysis. All those present who have an interest in this issue are familiar with the analysis and have a fair idea as to what are approximately 90% of the issues. People who are stakeholders in this regard, such as motoring and environmental journalists, spokespeople for different parties and players in the car and insurance industries, have a fair idea of what it is and my major question is where the Government's sense of urgency is in dealing with the issue. In a response to one of my colleagues in the Dáil, the Minister, Deputy Noonan, stated it would be early next year before any particular meaningful or tangible changes would take place, but meanwhile, people will face pretty significant increases in their premiums that they can ill afford.

While I do not intend to go through it, my party has produced an action plan to tackle rising motor insurance premiums and I wish to inform the joint committee of its existence as it may be a resource on which the committee can count. I will highlight some of the points raised therein, which include the re-establishment of the Motor Insurance Advisory Board on a time-limited basis. This worked successfully in the 1990s and helped to reduce insurance costs by up to 40% at that time. As the Minister of State mentioned the transparency of the insurance industry, I do not wish to labour these issues but again, it is an issue I wish to highlight. I refer in particular to how consumers, people who hold motor insurance premiums, often feel frustrated that a claim is settled against them without any consultation.

One should compare this with health insurance where one gets a fully itemised bill and account of what each practitioner was paid. That needs to be introduced. One of the things we would like to see is enhanced disclosure around renewal notifications. In the UK they have done a study which seems to indicate that when consumers are buying motor insurance they are most engaged in the first purchase of insurance and then stick with the insurer and drift after that. The Financial Conduct Authority in the UK describes this as a loyalty premium. One stays with the same insurer but it actually costs on average €110 per policy to do so. There needs to be some way to address this. The insurance provider might be obliged to say that a person has been with it for four or five years but that if he or she shops around, there is greater value to be had. Perhaps the Chairman or Minister of State can comment on the legality of this. My car insurance renews in November. My insurance provider has taken to providing the insurance disk in November as opposed to sending out the letter of renewal. If I accept the renewal, I then get the insurance disk in the run up to it. While the onus is on me to shop around, there should be some obligation on the insurer to say to me that I have been with it for four or five years but that it is costing me to be with it and it would be cheaper for me to insure with others.

The book of quantum will be dealt with but I want to raise it. It tends to be a reflection of the prevailing awards as opposed to what might be a suitable or appropriate award. That needs to be tackled.

I have spoken about the care-not-cash model, particularly for minor injuries. We have to be careful about that. There is genuine whiplash and there is fake whiplash. Who discerns the difference between the two? It is difficult to identify that.

I will go through the headings of the issues. The consistency in court awards in personal injury cases needs to be raised. The reform of the role of the PIAB is another issue. A big hit can be made in the legal costs in personal injury claims. False and exaggerated claims are another issue. One of the things that my party feels very strongly about is that there is legislation in place which allows that if any material aspect in a case in a sworn affidavit is false or misleading, the person is guilty of an offence for which the penalties are up to ten years in jail and a fine of up to €100,000. In practice, few cases ever reach the DPP. There was a very noteworthy case in the last six or eight months that hit the newspapers and about which the journalist, Peter Murtagh, wrote. It was taken to court and it was seen to be a completely fraudulent case. I wonder if there were prosecutions after that. A very strong message needs to be sent out.

I want to raise a couple of specific points. We have talked about strengthening road safety enforcement. There are a lot of things we can do about that. If we look at the UK for example, driver behaviour grows over time. In London, in particular, they have safety enforcement cameras, particularly at busy junctions and locations where there have been fatalities. They have installed speed and red light cameras at sites where people have been killed or seriously injured due to a driver going too fast or running a red light. That happens a lot particularly in the cities in Ireland. It reflects a behaviour that begins to be developed and taken for granted and which causes accidents. One of the points Fianna Fáil raises is about strengthening road safety enforcement. In the UK on roads where they have introduced it, the number of people killed or seriously injured fell by a dramatic 50%. That can only have a positive impact down the road for insurance.

I would like the committee, the Chairman and the Minister of State look at innovative insurance models. I am sure the committee is familiar with BoxyMo insurance. I would be hugely surprised if it was not familiar with it. It is an insurance company and is Ireland's first telematics dedicated insurance company. It fits a telematics device to the car, particularly for young people. That device tells the insurer how one drives and how far.

Each month the insurer sends out a report to the young driver on how their driving has been for that month and how they can improve it. Anecdotally, I understand that if a driver on the BoxyMo model hits 140 km/h at any stage they get a letter the following day saying their insurance is cancelled. The better one drives, the more one is rewarded. One is rewarded with additional kilometres at the end of each month. It is full tracking and it monitors younger drivers' behaviour and speed. It does not only monitor younger drivers. Each month they get a driving report.