Mr. Gerry Hassett:

Good morning Chairman. I thank the committee members for the opportunity to speak here.

By way of background I was asked by the board of Insurance Ireland to take on the role of interim CEO of the organisation pending the appointment of a replacement for Kevin Thompson. I have spent over 30 years in the insurance sector primarily with Irish Life and more recently with Great West Life in Canada. In both cases I was focused on the life and retirement part of the business. I now have a consultancy business which I will be returning to full-time once a new CEO has been appointed to Insurance Ireland.

I am pleased to be joined today by Michael Horan, non-life insurance manager with Insurance Ireland.

Insurance Ireland represents the Irish general insurance, health insurance, life assurance, international, reinsurance and captive management sectors. We represent 140 companies providing insurance domestically in Ireland and internationally from Ireland.

About 28,000 people are employed directly or indirectly in the sector, with one in four financial service jobs being in insurance. Our members pay out €13 billion in claims and benefits annually and contribute over €1.6 billion in tax to the Irish Exchequer every year.

The Irish market for motor insurance is currently served by 35 companies. However, the core market is primarily served by eight firms most of which are leading international players, with the balance serving niche markets like high-powered cars or specialist commercial vehicles. There are approximately 2 million Irish consumers with motor insurance and about €1 billion is incurred annually in motor claims. The market is highly competitive and the market share of the various players ebbs and flows in line with commercial activity.

Like any company or trade association, Insurance Ireland must fully comply with the law, including competition law. It was this requirement that informed our recent correspondence with the committee explaining the limitations relating to our ability to make a meaningful contribution on the topic of dual pricing due to the constraints of competition law. Our track record with the committee is one of always being available and open to discussing key policy issues, including the important issue of reform of the sector and issues pertaining to the cost of claims. When it comes to pricing policy, however, the rules are clear. Insurance Ireland as a trade association does not hold, discuss or facilitate any material in respect of the pricing of products. We have no access to data around product pricing or pricing strategies either on an industry basis or for individual firms. The pricing policies of companies is proprietary and highly confidential. For these reasons, it is difficult for us to help the committee in understanding the application of various pricing strategies operating in the Irish market. Competition law means that we cannot discuss how a company strikes a price for a particular risk. This is not something that we know nor something that we should know. I trust that committee members will understand the sensitivity with which we view this topic. We fully respect the committee's role, and having actively participated in previous meetings, we will do everything possible to participate constructively at today's meeting, notwithstanding the constraints. However, I should stress that we will be particularly constrained on the specifics of pricing policies at an industry level and in respect of specific company practices.

While Insurance Ireland has not been directly involved in the Central Bank review of the insurance market, we are aware that member companies have been engaging with the bank in recent months on the topic of differential pricing. We note the decision by the Central Bank to carry cut a formal review to: seek to establish the impact of differential pricing on consumers while at the same time establishing the drivers of consumer behaviour, including how customers engage with the insurance industry; and assess the extent to which these pricing practices lead to outcomes that are consistent with the consumer protection code. We welcome this review. In particular, we welcome the fact that it is evidence-based and will involve a comprehensive data-gathering and analysis phase. While Insurance Ireland does not see itself as being directly involved in the review process, we are confident that member companies will co-operate fully with it and engage proactively on any recommendation made.

I look forward to a good engagement and welcome committee members' questions.