Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

I wish the Minister of State, Deputy Eoghan Murphy, the very best of luck in his new Department. I welcome the opportunity to speak on this very important motion and the issue of rising insurance costs. Insurance costs have become a major issue facing motorists and the Government must explore every avenue to reduce insurance costs. Over the past year, increases of 30% and beyond in insurance premiums have become an industry norm. Figures released by Insurance Ireland show that the number of motorists denied quotes by three or more companies in the past two years has almost quadrupled, with no figures available for 2015 as yet.

Serious challenges are presented to the sector given the cost of insurance and the difficulty in getting viable quotes. Many leading companies are embarking on a policy not to ensure cars over 15 years old, and young drivers are experiencing extreme difficulties. I welcome the action the Government has taken to curb the rise in insurance costs - namely, the establishment of a task force in the Department of Finance, which is carrying out a review of policy in the insurance sector. It is clear that the cost of insurance is a complex one involving a number of Departments, State bodies and private sector organisations. I understand the task force is due to report back to the Minister shortly.

I note the Minister held a meeting in his Department on the 3 December last with insurance industry representatives in response to the increasing cost of insurance. However, while it is easy to highlight the problems, we must also put forward credible solutions. High Court awards have increased and the Injuries Board does not seem to have the influence on claims that it used to have. The book of quantum produced by the Injuries Board on the size of awards for various injuries has not been updated in the past ten years. I know work is under way in that regard, but one new initiative would be international benchmarking. For example, awards for whiplash account for 80% of motor insurance claims in this country, and awards amount to approximately €15,000 here compared to £5,000 in the UK. We must review legal costs for litigated cases across the board, given that costs have increased sharply in recent years. Reports by the industry that legal costs make up 60% of awarded claims are most worrying.

We must guarantee that insurance fraud is tackled, as fraudulent cases have a significant impact on the industry as a whole. It is estimated that uninsured driving represents an annual cost of €60 million to the industry, and we must ensure maximum resources are available to eradicate such practices. There can be no substitute for law enforcement.

We must assess the possibility of an international benchmark of premiums. We must also strengthen the PIAB. We must recognise that the claims environment has changed dramatically and new powers are required. Those include simple changes such as compelling claimants to provide loss of income information and to attend for medical assessment. The Central Bank must ensure that greater transparency is provided by insurance companies in the information supplied to it. We must also restore core competitive underwriting to ensure it becomes profitable again, as opposed to being subsidised by investment income. Many of those ideas have been raised by industry experts in the media in recent months. I am hopeful that the new task force will take all views into account prior to making its recommendations to the Minister. I hope sustainable insurance premiums will be available to all.

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