Seán Fleming (Laois-Offaly, Fianna Fail)
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That will certainly happen. People get confused in this debate. Some talk about differential pricing and others about dual pricing, which is a subset of that, price walking while others refer to loyalty bonuses or loyalty penalties. They are all quite different. I can understand that sometimes people use these terms interchangeably. We gave a commitment in the programme for Government and the action plan on insurance that we would deal with the dual pricing issue, which is the most egregious aspect of this. We did not want to do it in such a way as would have a negative impact on young drivers in particular who might not be able to get discounts as easily as they can up to now. That could happen under the kind of strict regime that the Deputy and her colleagues have suggested. We felt it would prevent new businesses from coming into the Irish market and offering reduced rates below the insurance base cost rate to build up market share and increase competition. We want to avoid all those negative impacts from things suggested by others and stick to the good bit in the legislation, namely eliminating the loyalty penalty. That is precisely what we are doing.

At the committee earlier this week, two companies said they had reduced prices by 10% this year and a third company said it had reduced prices by 5%. Those reductions are a result of the improved insurance environment that is the result of the Government's action plan. We made it clear that this was one key element. Legal costs will come into it and another factor will be increasing competition. To separate out one aspect of all the measures that will lead to cost reductions will leave out lots of other issues that will lead to cost reduction such as legal costs. For example, increased competition can lead to reductions that would not be captured. The instability around the costs of claims was one reason new insurance companies did not want to come to Ireland. They wanted stability and predictability and that is what they will get through the personal injury guidelines when they are fully implemented. Some companies have said that the price reductions they are giving this year is in anticipation of what PIAB will do. That is 40% based on the preliminary figures. Many people are not happy that they are not getting the same types of awards as they would have received last year and are challenging them in the courts.

The good news is that when the awards are confirmed by the courts there will be further reductions in addition to the 10% that some of the companies have already applied next year.

I am aware that there are two more speakers but only 20 minutes left so I will leave it at that for now.