Alan Farrell (Dublin Fingal, Fine Gael) | Oireachtas source

I thank the Ministers for sharing time with me. As the Minister for Finance knows, this matter was raised in the Dáil by me last week, having temporarily been assigned to the Department of the Minister for Jobs, Enterprise and Innovation in the preceding week. Fianna Fáil is to be commended for raising the matter as it affects the vast majority of constituents in the State, whether it relates to home or car insurance. I read the figures into the Dáil record and the only sector that saw a decrease in premiums was the travel insurance area. It saw a slight decrease. I read into the record last week an example from one constituent not too far from my age. He is 36 and drives a car with a 1.4 litre petrol engine. He has five years of no-claims history and three penalty points, which were on his licence when he got his insurance last year. His policy increased, if I recall correctly, by 85%.

There is no justification for that and if we consider the profit margins of the vast majority of the motor insurance companies, for example, as I have researched it, all of them have made great inroads either in terms of profit or corrections to losses made in previous years due to the reduction in economic activity and the number of vehicle users on the road. One firm had left its deficit at £20 million, when it had been £97 million two years beforehand. The bottom line is that legal costs have only increased by 1% in the last number of years so these have not pushed insurance premiums up by as much as 35% in the motor insurance business.

This afternoon we all received a briefing note from a lobbyist on behalf of the insurance business suggesting that this was somebody else's problem and it was not profit-gouging but we know better. The research is on the Dáil record and it has been submitted to the Department of Finance. I thank the Minister of State, Deputy Eoghan Murphy, and his officials for writing back to me this morning, acknowledging receipt of the documentation that I sent to them. They included notes for my contribution last week in the House and this fed into the review group that the Minister, Deputy Mitchell O'Connor mentioned when I arrived into the Chamber. It is a welcome move by the Government. I appreciate that this is a very pressing issue and I was originally informed that it would be the end of the year or, possibly, early next year before the process could be completed, meaning it might take even longer for us to see a result. It is encouraging that the Department has recognised the problem, has attempted to address it by verifying the factors that increase costs so significantly to the end user and is considering whether the Government can step in and play its part in reducing the overall cost to the insurance business so it can reduce costs itself, although I believe that to be a tiny percentage of the overall costs involved.

My next issue, the cost to the insurance sector of the Setanta crash, was mentioned by another lobbyist from the Motor Insurance Bureau of Ireland, MIBI. It made a very valid point in arguing that the increase in claims would result in a 150% increase in its overall settlements over 12 months because of the Setanta issue. The court case that was recently decided would inflict the total cost on the MIBI rather than the insurance compensation fund that was previously dipped into.

It set a very unfair playing field for the MIBI, which is there to benefit the consumer and to reduce costs for the industry through settling matters outside of court rather than passing them on to the Insurance Compensation Fund, which, going by its name, is there for that specific purpose. There is something that has to be addressed in that process. I thank the Ministers for sharing their time and I apologise to the Acting Chairman for being out of breath.

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