Mr. Peter Boland:

I thank the Chair and the members for inviting us here today. We very much appreciate the invitation.

When the Alliance for Insurance Reform first presented to this committee in May 2018, it consisted of 21 representative organisations highlighting the negative impact of persistently high premiums and calling for real reforms that will quickly reduce liability and motor insurance premiums to affordable levels and keep them that way. A measure of the scale and scope of the crisis facing us on insurance is that the alliance now consists of 46 civic and business organisations from across Ireland, representing over 55,000 members, 700,000 employees, 622,000 volunteers and 374,000 students, as outlined in appendix 1 to the presentation that committee members have in front of them.

Since we last presented to the committee, in April 2019, the insurance crisis for our members has worsened considerably, albeit in a way that has been masked by the impact of the pandemic. In particular, liability insurance premiums continue to increase, despite recent reforms and a collapse in economic and social activity, neither of which are being reflected in renewals. Increasing numbers of sectors and sub-sectors cannot get cover or are reduced to one underwriter, which inevitably results in large increases in premiums. A current list of 44 such sectors and sub-sectors is included in appendix 2.

The crisis is existential in many of these sectors. On this point, I strongly contest the characterisation the Minister of State made in his presentation of some of these sectors as being high risk. Some of them may be characterised by the insurance industry as high risk but, inevitably, when that is examined, they are not truly high risk. They manage their risk exceptionally well. In fact, they are subject to a high level of claims, which is completely different, and to necessary ongoing reform. To characterise them as high risk runs the risk of having them dismissed as in some way uninsurable. If that kind of characterisation is applied to areas such as childcare, home care, nursing homes, the night-time economy or road haulage, it will be a very depressing day for the economy and society. That is just a brief tangent from my presentation.

Following some positive progress on issues such as judicial guidelines, the establishment of the Garda insurance fraud co-ordination office, IFCO, and the commencement of the Criminal Justice (Perjury and Related Offences) Act 2021, there is increasing alarm among our members regarding the slow pace of other key reforms, such as rebalancing the duty of care, reforming PIAB and the establishment of a State-controlled claims database. Furthermore, resistance to meaningful reforms is increasing, with a large number of legal challenges to the new judicial guidelines lined up. Ultimately, it is clear neither the economy nor the fabric of society will fully recover from Covid-19 unless insurance is sorted out.

With regard to the Bill, while we welcome the emphasis on greater transparency, more robust enforcement of elements of the Consumer Insurance Contracts Act 2019 and more clarity regarding the temporary run-off regime necessitated by Brexit, the Bill will merely tweak existing arrangements, and we do not believe any of the measures included will increase the availability, or bring down the cost, of insurance. As for what will, the answer is competition. While it will not be at a level that will bring us in line with England and Wales, never mind other European jurisdictions, the judicial guidelines that were implemented on 24 April are expected to deliver significant reductions in premiums. That process has begun in the motor insurance sector, as the Minister of State mentioned, where there is meaningful competition, with respondents to our ongoing policyholder survey reporting a 10% reduction on average in motor premiums on renewals since 24 April, a percentage that tallies with the CSO data he cited.

In the liability sector, however, where there is markedly less, and often no, competition, policyholders are experiencing average increases of 16%. It is clear to members of the alliance that additional underwriting capacity and competition are urgently needed in the liability insurance market. While the Cabinet committee sub-group on insurance reform has acknowledged this by establishing the office for insurance competition in December 2020, the work of this office has not yet had any impact on the affected sectors. That office has a positive story to tell the international insurance markets in terms of the judicial guidelines, the Garda IFCO and the perjury Act, but these gains must not be undermined by incumbent insurers settling above the new judicial guidelines. The State must not allow the reform process to be derailed by the multiple legal challenges to the judicial guidelines launched by that sector. With this in mind, the latest statistics I am hearing from members suggest a logjam of claims is beginning to appear in litigation because some feuds are being settled in anticipation of some clarity from the court challenges. We urgently need to resolve those challenges, but we fear the public interest is being undermined by a rush to protect legal fees in the personal injury area. The challenges, in our view, are clearly motivated by greed on the part of the legal profession and not by any genuine concern for plaintiffs' interests. This has been backed up by multiple NCID reports.

The sales pitch to attract additional insurers to the Irish liability market must also include the rebalancing of the duty of care, reform of PIAB and the establishment of a State-controlled fraud database freely accessible to all insurers. The attractiveness of the Irish market to insurers must be protected and further developed through holding firm on the new judicial guidelines in settling claims, by protecting the guidelines from multiple legal challenges and by pursuing other key reforms, one of which relates to the duty of care. In essence, when injuries or alleged injuries occur on a premises, occupiers such as SMEs, charities, sports organisations or event organisers are now regularly assumed to have an absolute duty of care when it comes to visitors such as customers, clients or others, whereas the concept of personal responsibility has been significantly diminished in the courts and in the interpretations of insurers in recent years.

The Cabinet committee subgroup on insurance reform published its most recent implementation report in July 2021. In it, the subgroup reported that the Department of Justice was working on a general scheme to give effect to the proposals on the duty of care and expected to bring these to the Government in September 2021 for approval. However, the general scheme has not yet been published and no revised timeline for its publication has been given, other than a worrying reassurance from some Ministers that the proposals are at an advanced stage. My colleague, Ms Sheridan, will gladly share her specific experiences with the committee in respect of the duty of care. The duty of care must be urgently rebalanced in a manner that is fair, reasonable, practical, proportionate and in the public interest.

Turning to PIAB, which is overlooked by the Department of Enterprise, Trade and Employment, the alliance believes the board is a sound concept rooted in the common good that has been fundamentally undermined by numerous and ongoing challenges by the legal profession. As such, we welcomed the public consultation on enhancing and reforming the board carried out in April of this year by the Department of Enterprise, Trade and Employment, and we believe radical reform is necessary to give PIAB the meaningful status it deserves. The Cabinet committee subgroup on insurance reform, in its July report, stated it was intended to publish in July a general scheme of a Bill to reform PIAB, but we have still not seen that general scheme. Radical reform of PIAB must be pursued as a matter of urgency.

In conclusion, the Government acknowledged the seriousness of the insurance crisis in establishing the Cabinet committee subgroup for insurance reform in September 2020, chaired by the Tánaiste and including many of the key Ministers and Ministers of State involved in this issue. After some initial progress on issues such as the judicial guidelines, the subgroup appears to have regressed to a box-ticking exercise, recently focusing on the number of actions that have been carried out among the 66 that were initially targeted, when what is needed is an intense focus on key reforms relating to the duty of care, PIAB and the claims database. Regrettably, the Bill being scrutinised today will not provide those key reforms.

If we continue to lose momentum on the key issues, we fear the war against unsustainable insurance costs will be lost.

This concludes our formal presentation. As an alliance, we are intensely aware of how urgent this issue is for our members and their employees and volunteers. We hope the committee will help us in getting meaningful action on this. We are now happy to take questions.