Mr. Philip Bradley:

I am the CEO of AXA Ireland. I thank the committee for the invitation to this meeting, in particular for its flexibility in facilitating the meeting today when I unavoidably had to decline the invitation to the meeting last week. I am joined Ms Deirdre Fagan, who is a senior claims manager at AXA Ireland and Ms Antoinette McDonald, who is our customer and marketing director.

AXA Ireland is the largest general insurance company in the Irish market, with approximately €900 million of premium income and over 1 million customers. We operate across the island of Ireland and we employ over 1,400 people here. We operate in all channels of the market and offer products direct to consumers and via intermediaries and partners. Our direct channel is supported by an extensive branch network, including call centres and online capability. We offer a wide range of insurance products, including motor insurance, home insurance, farm insurance and insurance for small businesses. AXA Ireland is part of the AXA Group which is one of the world’s leading insurance groups, with operations across the globe.

I took the opportunity to review the committee’s meeting with a number of companies in the sector last week and, to my mind, there was a clear focus by the committee on two issues in particular. The first was how individual insurers were responding to the decision of the Judicial Council to review its guidelines and whether the companies would reflect that decision in respect of motor premiums. The second was how individual insurers were dealing with business interruption claims arising from the Covid-19 pandemic.I am sure we will get the opportunity to discuss these issues in more detail momentarily, but I will make a few comments on both.

I am constrained by competition guidelines in commenting on the specifics of pricing action. However, on the issue of the Judicial Council decision and its impact on car premiums, I can confirm that AXA Ireland has already begun passing on premium reductions to customers as a direct result of the positive decision of the Judicial Council in March. Indeed, the benefits of those rate reductions are evident in premiums written by AXA Ireland since March, and we have now begun writing individually to customers to formally confirm to them that their premiums will be lower as a direct result of the decision of the Judicial Council. On business interruption insurance linked to the pandemic, AXA Ireland acted quickly, applying a fair, transparent and proactive approach. Two core principles underpinned our actions: first, to honour all claims within the terms of existing policies; and second, to provide certainty and consistency to customers. On that basis we wrote to customers and brokers shortly after the first lockdown commenced at the end of March last year and we confirmed cover under the AXA shop, office and surgery policy. We made first claims payments in early June of last year. To date, 94% of claims for our shops, offices and surgeries have been settled.

We have also received 459 separate claims under a different policy, which is called AXA enterprise commercial property policy and does not provide cover for business interruption from Covid-19. Some of these customers understandably challenged this position and to progress the matter quickly, AXA Ireland funded a legal challenge, which will act as a test case under the Central Bank of Ireland business interruption supervisory framework. That case was heard in January of this year. In recent weeks, the High Court made its decision on this matter, and the court found in favour of AXA Ireland. That decision may yet be appealed and if that is the case, we will support an early hearing on the matter in order to bring certainty to the companies that have made the claims.

Last week, some members of the committee asked whether, in business interruption claims, the insurer would deduct the value of State supports linked to the pandemic which were received by businesses. From our perspective the answer to that is "Yes", because that is the basis on which the policy was written and the risk insured. One of the general principles of insurance is to place customers back in the same financial position before the loss, neither better nor worse off. The AXA product is consistent with this guiding principle in that it was specifically designed to incorporate such deductions to reflect the mitigating actions that policyholders have made to reduce the scale of their financial losses. AXA Ireland did not deduct any State supports which were intended to support a business in reopening or to help it to manage future cashflow, such as future rate waivers or reopening grants. I recognise that others, including members of the committee, have a different view on this issue. We will welcome discussion with the Minister to tease out this important and complex issue further.

Finally, I thank the committee for its commitment to supporting efforts to reduce the cost of insurance and to ensure a sustainable insurance sector at the heart of this economy. AXA Ireland will continue to do all we can to support this work. I thank members for their attention and look forward to their questions.