Mr. Brian Hanley:

Chair, Deputies, Senators - thank you for the opportunity to address the committee today. The Alliance for Insurance Reform represents 48 civic and business organisations across Ireland. Collectively, our members represent over 55,000 organisations, 700,000 employees, 622,000 volunteers and 374,000 students. I hope nobody asks me to count them again. We exist to highlight the negative impact of persistently high liability in motor insurance costs in Irish society and have provided the committee with a detailed submission regarding same in advance of this session.

In recent years, the Government and the Oireachtas have delivered important reforms. We acknowledge the scale of that work, from the introduction of the personal injury guidelines to new data from the Central Bank's national claims information database, a strengthened Injuries Resolution Board and changes in duty of care law, as well as initiatives on insurance fraud.

These reforms were presented by insurers as the conditions needed for premiums to fall but the evidence shows they have not. According to the Injuries Resolution Board, claim volumes fell by 40% between 2019 and 2023. Median awards are down by one third, yet the Central Bank reports liability premiums increased by 17% between 2020 and 2023 while insurers reported profits of 13% in 2023, more than double international norms. Our survey of 775 organisations this year found 74% faced premium increases in the past two years and only 14% saw reductions; 20% had only one insurer willing to cover them and 90% said they had yet to benefit from the reforms. Case after case shows small businesses and voluntary groups are paying more for less cover, despite safer practices and fewer claims. These costs are damaging competitiveness, investment and community services across the country.

The gap between reform and reality must now be closed. There are four key areas where action is urgently required. First, the personal injury guidelines were designed to ensure consistency and bring awards more into line with those of other countries, which they have clearly helped to do. However, we have seen this year that the process for reviewing them is flawed. We support recommendations to amend the Judicial Council Act 2019 to extend the review cycle, introduce international benchmarking and mandate proper consultation with the Injuries Resolution Board. We also believe that amendments are required to afford greater legislative discretion to amend or reject recommendations and that this committee should be required to consider any future recommendations before the Government takes a decision.

The second key area is competition. The liability insurance market has seen no new entrants in over a decade. Too many businesses report being effectively captive to one or two underwriters. The office to promote competition in the insurance market must be properly and additionally resourced, be given KPIs and have a published strategy. The Competition and Consumer Protection Commission should review the barriers to entry and the impact of recent broker consolidations. Without real competition, premiums simply will not go down.

The third key area is transparency in data. We need faster and fuller publication of NCID reports within 12 months of year end, not 18 months later, as is often the case with liability reports. Additional information is required regarding insurers' practices when it comes to reserving, reinsurances and remittances. The proposed transparency code in the new action plan for insurance reform must apply to liability as well as motor cover and must be independently designed, not co-written with insurers.

The fourth and final key area is claim resolution and legal costs. Two thirds of liability claims are still settled through litigation, even though the average award values for claimants are broadly the same whether they settle at the Injuries Resolution Board or through the courts. The only major difference is cost. Average legal fees are under €1,000 via the Injuries Resolution Board but over €23,000 in litigation. These often-unnecessary legal costs add years of delay and tens of thousands of euro to the final bill, which is ultimately borne by businesses and voluntary groups. We want to see a far greater number of cases settled at the board and fee scales introduced to control legal costs. Transforming the board into a decision-making body similar to the Workplace Relations Commission should also be examined.

Reforms have been delivered, yet businesses and voluntary groups will experience the full benefit of reforms only if the key areas of competition, transparency, the personal injuries guidelines and legal costs are addressed. At the same time, patience with insurers has worn thin. The repeated justifications for failing to pass on the savings while profits in the liability market continue to grow are no longer credible. Premiums should now reflect the clear reductions in claim volumes and awards. Without this alignment, competitiveness and community activity will remain under pressure. Our message is straightforward: the process of reform is not yet complete. Further measures are needed and will certainly help, yet there is no reason meaningful and sustained reductions in premiums cannot begin in advance of any additional changes.

The next stage should focus on ensuring outcomes that are felt on the ground, not just recorded on paper. The alliance will continue to engage constructively with members to help to achieve that.