Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

To address the Senator's point, we have tried to remain focused in this legislation. Some of her comments reflect the position taken by the Central Bank on price walking or dual pricing. I complained and brought this to its attention, as did others, including in the media. When we initially wanted to ban this practice, we looked at a dual process. One part involved submitting a complaint to and meeting the Governor of the Central Bank, who agreed to carry out an investigation on the back of that. The second part involved drafting legislation to ban the practice, which we were progressing through the House. It did more than ban price walking, since it banned some of the predatory practices used by the insurance industry, so that premiums would have to be based on risk, along with a profit margin, operating cost and so on.

The Senator asked a question about profits. We have information about the sector's profits, which are reported on by the national claims information database each year. It gives a breakdown of public liability and motor insurance. We are able to see the profits across the sector. They were quite high, especially for motor insurance, in 2020, the last year for which data are available. The operating profits were 12% of the income. That is four times higher than the average in the previous decade, which the Central Bank calls hyper profits. Many insurance companies before this committee would talk about trying to have profit margins of about 4%. That spells out the gouging that is happening.

The Senator mentioned reforms that have taken place and more that have to take place relating to, for example, the duty of care. The key thing about this legislation is that, while we have been passing legislation to try to drive down insurance costs, there is no way for us to ensure insurance companies actually drive down costs. We cannot force them to do so. We are trying to introduce transparency. There are commitments to look for fraud and look at awards. Awards make up much of the cost of insurance. This legislation places an onus on these companies that operate in Britain. Mr. Boland mentioned Manchester. For many of these companies, Ireland is like Manchester, since it is a subdivision of a larger British company. They have a responsibility in Britain following changes to whiplash awards introduced by the House of Commons, which were lower than here in the first place and were driven down further. Those provisions sought to ensure that every reduction in awards was passed on to consumers. This would need to be replicated across the board. If we rebalance the duty of care, we need to ensure that it is not pocketed by the insurance industry and does not just lead to more profits because of the lack of competition. Companies cannot be forced to do this but we can collect data, have more transparency and, where necessary, call companies out for not living up to the commitments they gave these Houses when they looked for changes in the first place.