Ms Moyagh Murdock:

I am delighted to be here today to contribute to the committee's scrutiny of the Judicial Council (Amendment) Bill 2021.

I am the chief executive of Insurance Ireland. I am joined by my colleagues, Ms Jacqueline Thornton, director of regulation and policy development; Mr. Michael Horan, manager of policy and regulation; and Mr. Florian Wimber, director of advocacy, communications and public affairs.

Insurance Ireland is the representative body of the Irish insurance industry. We represent approximately 130 members providing cover to more than 25 million customers in more than 110 countries. The total value of assets of the Irish insurance industry is €489 billion. The insurance sector, including Insurance Ireland members, employs 35,000 people in Ireland and generates approximately €1.6 billion in tax income per year. Ireland is the fifth largest market for insurance in the European Union and the biggest exporter of insurance services.

Insurance Ireland and its members firmly support the agenda for insurance reform and the implementation of the personal injuries guidelines. We greatly appreciate the efforts the Government and Members of the Oireachtas have made to progress these reforms. Many members of this committee have worked on insurance and claims cost reforms for years. Insurance Ireland advocated for the introduction of the personal injuries guidelines, which seek to reduce and ensure consistency in the level of awards for personal injuries. The personal injuries guidelines have the potential to represent a milestone in the Irish insurance market if they are consistently applied. We note the recent PIAB, award values report, which confirmed the application of the guidelines by PIAB and the impact the new guidelines have had on the awards levels to date. However, we are concerned about the decreasing acceptance rates of PIAB awards by claimants since the guidelines' introduction. It is reasonable to assume that this trend is leading to more cases going to litigation. The backlog in the courts and the ongoing legal challenges to the personal injuries guidelines present significant uncertainties as to the efficacy of the guidelines.

While Insurance Ireland cannot comment on pricing-related aspects of the guidelines, a commitment to pass on claims savings was given to the Oireachtas by insurance company CEOs when they appeared before this committee. We understand the motivation and interest from political decision makers in monitoring the impact of the personal injuries guidelines and providing transparency to the public. Two proposals have been presented to fulfil this function, namely, the Judicial Council (Amendment) Bill 2021, which this committee is discussing today, and the provisions included in the Insurance (Miscellaneous Provisions) Bill 2022. The proposals in the first Bill follow the example of the UK’s Civil Liability Act 2018, while the Insurance (Miscellaneous Provisions) Bill makes targeted amendments to the existing reporting and disclosure requirements for the national claims information database, NCID. While both proposals might fulfil the envisaged objective, we strongly believe that the provisions proposed under the Insurance (Miscellaneous Provisions) Bill are more effective and that outputs will be delivered more expediently. This Bill, while intended to achieve the same outcome, would duplicate existing and alternative data sources such as the NCID, which already captures granular information on premiums and claim costs over a number of years.

The data sourced from the NCID allow for the monitoring of trends such as the impact of a changing regulatory and economic environment. As it stands today, all insurance firms providing insurance services for private motor and employer and public liability in Ireland already submit to the NCID. The data collected from the NCID undergo rigorous review and enhancement. Moreover, under the Insurance (Miscellaneous Provisions) Bill, a mandate for the Central Bank to collect further data is planned. We also understand the Central Bank is already working on additional reporting requirements to track the impact of the personal injuries guidelines more effectively. The establishment of the NCID and the annual reports produced have served to significantly improve data availability in the Irish insurance market, as well as support policy analysis on premiums, claims costs and deriving trends over a long period. The collection of these data enables the Central Bank to publish an annual report containing analysis of the cost of claims, the cost of premiums, how claims are settled, how settlement costs vary depending on how claims are settled, and an analysis of the various types of costs, such as legal costs, that make up settlements. The NCID is already a comprehensive independent data repository that tracks the performance of the Irish motor and liability markets. The additional improvements to the NCID will enhance its value in improving transparency within the Irish insurance market further. Therefore, the development of the NCID should be prioritised, instead of creating a parallel and duplicative data reporting and sourcing stream.

This Bill seeks to align Irish regulation with UK regulation at times when other jurisdictions are moving in different directions. The UK system will provide its first data in October 2023. At that point in time, the NCID will already have informed the discussion in Ireland for more than three years. The NCID system is up and running and reports have and will be published throughout 2022 and 2023, long before the UK regulators and public will see the outcome of their exercise. The NCID provides factual and detailed data that enable Members of the Oireachtas to verify whether Irish insurers pass on savings to their customers, and will help inform any public policy decisions that may be needed with regards to future reforms.

We understand the interest in monitoring the impact of the application of the personal injuries guidelines and we support these efforts. We will support initiatives to collect the necessary data to assess the progress of the guidelines and to enable informed policy discussions. We advocate for a proportionate, sound and sensible approach to collecting this information. In our opinion, the more proportionate way of doing this is through the NCID. I thank the committee for this opportunity to present our position. I look forward to answering any questions members may have.