Mick Barry (Cork North Central, Anti-Austerity Alliance) | Oireachtas source

Suppose we wanted to strike a blow against the interests of young people, old people and people on low incomes simultaneously, how would we go about doing it? The insurance industry gives us a case study of how it can be done. Last summer, Allianz and Aviva announced they were no longer taking new business for cars of 15 years or older. There was an outcry and the usual mantra was trotted out - shop around. What happened when people went to the other insurance companies which kept their doors open for this business? I will give the example of a constituent of mine. He was 50 years a driver, without one penalty point, with a full no claims bonus and his car had a full NCT. What happened with his premium last summer? It had been €329 for third party, fire and theft and it nearly doubled to €610.

There are 250,000 cars in the Republic of Ireland which are 15 years or older, which is 13% of all cars. When we multiply 250,000 cars by that type of markup, or even a third of that markup, it makes a very tidy profit indeed. That is just one small example of the way this industry operates. The example I gave is about profiteering, not road safety. The Road Safety Authority stated in 2012 that vehicle condition was a serious contributory factor in what percentage of fatal car accidents or serious injury collisions? The answer is 0.2%, or seven cases out of 3,200. That is just one small example of the kind of profiteering that goes on. It strikes a blow against the young, who cannot afford cars that are, say, six or seven years old as opposed to 15 years old, against the old, who might have an older car because they only use it on a limited basis, and against all people on lower incomes. Welcome to the world of car insurance in Ireland in 2016.

Deputy Bríd Smith correctly made the point that this bears down particularly on younger drivers. No one disputes that younger drivers should pay a higher premium because, if there is a greater risk, there should be a higher premium. However, the increased price should be in line with the increased risk, not way above it. What are the sections of drivers the industry is making the most profit on? I will give an example based not on a one-year model but on a five-year model to allow for the processing of claims and to give the full picture. For provisional drivers, the average premium for a young man aged 21 to 24 is €1,422, on which the insurance company makes an average profit of €560. For people on full licences, the biggest profits are made on young men aged between 17 and 20, with an average premium of €1,701 and average profit per premium of €287. Deputy Bríd Smith has given the example of the €1 billion gap between claims awards and the income of the insurance industry as a whole, not just motor insurance. While there is the mystery of how far out-of-court settlements bridge that gap, what we do know is that, between 1994 and 2014, motor insurance profits in this State were €2.866 billion, with an annual average return on investment of 12.2%.

To conclude, we have seen the role of the State propping up big insurance companies in the Quinn bailout, with a possible bill of €1.6 billion and with the tab paid by the taxpayer and the policy holders. We need a different role for the State in terms of intervening on behalf of policy holders. In Canada and Australia there are states where the state provides not-for-profit insurance, so why can this not be done here? We look at the figure of €2.866 billion profit over 20 years. With State-run, not-for-profit insurance, we can imagine the type of cuts in premiums that could be provided for policy holders. We are talking big money. However, that would require a Government prepared to challenge the interests of the big insurance corporations. Fianna Fáil and Fine Gael have certainly not been prepared to do that. It is a powerful case for a radical left Government in this country.

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