Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank Deputy Farrell for his comments and for raising this important issue this evening. I welcome the opportunity to discuss the issue of insurance costs. I am aware of the concerns of Deputy Farrell and concerns throughout the House about the increasing cost of insurance. It is an issue of concern for individuals, households and businesses throughout the country.

Consumers, be they individuals or businesses, need to have access at a reasonable cost to the insurance products they require. Healthy competition within the insurance industry should facilitate this, and with regard to competition, the National Competitiveness Council has emphasised that a resilient and well-functioning insurance sector contributes to economic activity and financial stability.

It is important that Ireland has an insurance sector that is not only financially stable but contributes to economic activity. The insurance sector makes a vital contribution to the Irish economy, through employment, attracting global capital and serving the needs of consumers.

In general, a number of factors drive the cost of insurance. Differing reasons have been put forward by various interested parties to explain Ireland's increasing insurance costs. Motor insurance, as the Deputy pointed out, appears to be particularly affected, with the cost of premiums increasing by more than 34% in the past 12 months.

To examine these issues in more detail, the Minister for Finance has asked his officials to undertake a review of policy in the insurance sector. This is being undertaken in consultation with the Central Bank of Ireland, other Government Departments, agencies and interested bodies. The objective of the review is to recommend measures to improve the functioning and regulation of the insurance sector.

The first phase of the review, which is nearing completion, is concentrating on an examination of the framework for motor insurance compensation in Ireland after the failure of Setanta. This work is being conducted by a joint working group comprising officials of the Department of Finance and the Department of Transport, Tourism and Sport. The outcome of this work will feed into the wider review of policy in the insurance sector.

The availability of relevant and timely data to facilitate an in-depth analysis of the issues is also a matter to be addressed in the review, as the current lack of data presents difficulties from a policy analysis and development perspective, and the Deputy referred to this in his contribution. As the National Competitiveness Council report on insurance states, it is important to obtain data forensically because so many elements contribute to insurance costs. The Department of Finance is working closely with the Central Bank of Ireland and has met a number of stakeholders, including the Department of Jobs, Enterprise and Innovation and the injuries board. The Department of Jobs, Enterprise and Innovation has advised that the injuries board expects to have the revised Book of Quantum ready as soon as possible. While the review will examine the issues, it then will be necessary to approach the relevant areas to ascertain where improvements can be made that can feed into reducing the cost of insurance.

It is important to note it will continue to be the case that insurance premiums will be priced individually by insurers, which use a combination of rating factors in making their individual decisions on whether to offer cover and what terms might apply. While insurance premiums cannot be directly influenced, and the Government cannot interfere in how insurance companies price their insurance products, this does not preclude the Government from introducing measures that could, in the longer term, lead to a better claims environment that could facilitate a reduction in claims costs.

Officials will continue to work on the review of policy over the coming months and the work is expected tobe completed by the end of this year. I would very much appreciate the opportunity to examine with the Deputy his research and the figures he has shared with the House and submit them to the ongoing review, if it will help in its work, and in completing it as soon as possible.

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