Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move:

That Dáil Éireann:

notes that:— spiralling business and motor insurance costs are undermining the competitiveness of the State and pressuring businesses and households;

— the National Competitiveness Council has cited the cost of doing business, of which insurance is a major contributor, as a major concern to businesses across the country;

— as of 2014, small and medium sized enterprises (SMEs) employed over 900,000 people in Ireland;

— business insurance, specifically public liability and employer liability insurance, is a major and growing cost of doing business in Ireland and is particularly a major issue for SMEs;

— many SMEs have experienced business insurance cost increases of between 6 per cent and 15 per cent according to research from the Irish Small and Medium Enterprises Association;

— increased insurance excess and insurance exclusions are becoming an ever increasing issue for all businesses;

— the practice of insurance companies using non-disclosure at the point of a claim for the sole purpose of avoiding payment, when such discoveries and enquiries should have been made at the proposal stage, is unacceptable;

— motor insurance has increased by 11.6 per cent in 2014, 30.8 per cent in 2015 and 8.9 per cent in 2016; and

— while monthly motor insurance inflation in 2017 has remained level, individuals, families and businesses are facing unsustainably high insurance premiums;

further notes that:

— a motion was passed by it on 9th June, 2016, urging the Government to act on this issue;

— the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach published the Report on the Rising Costs of Motor Insurance setting out a series of recommendations;

— the Government only published its Report on the Cost of Motor Insurance as late as January 2017;

— only ten action points were scheduled for completion by the end of the first quarter of 2017, more than three years after the explosion in motor insurance premiums began;

— three of these action points have yet to be completed; and

—there has been complete inaction on tackling business insurance costs; and

calls on the Government to:

— urgently complete the remaining action points set out in the Report on the Cost of Motor Insurance, which were set to be completed by the end of March 2017;

— amend legislation and require insurers to provide a breakdown of the premium cost to the customer and to have this completed before the current deadline of the end of June 2018;

— develop a general protocol that requires insurance companies to notify policyholders of claims made against them before settlement and to have this done before the current deadline of the end of December 2017;

— establish a national claims information database before the current deadline of the end of June 2018;

— have the Personal Injuries Commission report before its current deadlines of the end of December 2017, and the end of March 2018;

— establish a fully functioning database to identify uninsured drivers compelling insurance companies to provide the driver license number before the current deadline of the end of December 2018;

— establish a clear timeline for the Cost of Insurance Working Group to complete its report on employer liability and public liability;

— extend this assessment to other relevant areas of business insurance, including an assessment of the extent to which insurance excess and insurance exclusions are being used at the expense of customers;

— undertake a comprehensive study on the cost of obtaining all insurance to businesses with the aim of providing transparency to the sector and in order to track developments in the market;

— bring forward legislation to enhance transparency in the sector by requiring insurance companies to provide a detailed breakdown of premiums for business customers;

— require insurance companies to inform business customers of the fact that a claim has been made and/or settled against them and the details of that claim;

— extend the Personal Injuries Commission to employer liability insurance and public liability insurance; and

— address the issue of insurance companies using non-disclosure at the point of a claim to avoid payment when such discoveries and enquiries should have been made at the proposal stage.

We are again raising the issue of insurance, this time not just motor but also business insurance. As the Minister of State knows, in June 2016 we used our Private Members' slot to put the focus on motor insurance and proposed changes which we felt would make a real difference to the spiralling premiums people have had to endure.

The Government responded and the following month set up the working group which reported in January 2017, around the same time as the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach reported, with 33 recommendations from the Government's working group and over 70 action points. I welcome the work that is being done, but more can and needs to be done.

There needs to be greater ambition in the Government's approach and there has to be swifter implementation of the key recommendations, in particular those around the establishment of a national claims database, which is not due for another year or so. The work of the personal injuries commission needs to be accelerated, and the central issue there is benchmarking the level of awards in Ireland vis-à-visawards in other jurisdictions.

We need legislation on the motor insurance compensation framework so that if another Setanta Insurance collapse occurs there is clarity on who foots the bill in such a scenario. That is a priority. We need to have the report on the role of legal fees in the resolution of insurance claims brought forward earlier than the anticipated date of the second quarter of 2018.

The issue of uninsured drivers is, unfortunately, playing an increasing role in society and is, of course, a menace which has to be condemned in all respects. The database of uninsured drivers which is technically possible, in terms of the different datasets that are available through the national fleet database, the databases of different insurance companies and so on is not due until the end of 2018.

I welcome the CSO data that shows some stability in the market. It does not match the reports I have received from constituents who are still receiving renewal notices in the post advising of increases of 20%, 30%, 40% and, in some cases, even more. There is discrimination against certain categories of drivers. Drivers with older vehicles which have up-to-date and valid NCT certificates are being asked to pay exorbitant renewal premiums. God help older or younger drivers, emigrants returning to Ireland or anyone with an open claim, in terms of what quote they will be given. Taxi drivers are being driven out of business by virtue of the quotes they are getting, if they are lucky enough to get one at all.

We know from the declined cases agreement with Insurance Ireland that the number of people who simply cannot get a quote has multiplied elevenfold in the past four years. Almost 2,000 cases have been brought before it.

A central issue is the need for greater certainty around the level of awards. Insurance companies are settling out of court and outside of the injuries board process out of fear of what an award will be if they go through the court process. That fear is driven by experience. There is a need for greater certainty and consistency in regard to the level of awards. Companies are simply not taking the risk. Many dubious claims are being settled and people are being paid "go away" money, to put it mildly. That is the reality of what is happening and it is because we have a dysfunctional market which is simply not meeting the needs of consumers.

On the question of business insurance, the CSO is not capturing that data so we have no firm evidence of the level of premium renewals that are being issued to businesses. The key issue is employer liability and public liability. Any business that has a significant level of public footfall, businesses in the service industry, pubs, hotels and restaurants are being hammered with significant insurance increases.

The Minister of State and I were interviewed earlier today, and I quoted figures I received from the Restaurants Association of Ireland. Many restaurants which have had no claims in recent years are facing a doubling of their insurance policies. It is not good enough and it cannot go on.

Many people in business are now making the decision not to renew their insurance at all and are taking the crazy risk of having no insurance cover in place in respect of public liability or employer liability for their businesses. Many of these people are not in limited liability companies, therefore they will be on the hook in the event of a claim which could potentially go all the way.

There is a significant degree of commonality between the issues on the motor insurance and employer and public liability sides which affect businesses. Insurance companies on the business side are becoming increasingly selective. The terms of policies are being changed. The levels of excess in policies are increasing significantly. The levels of exclusions now being specified within policies is also being expanded. They are vital issues.

The cost of insurance working group, phase two, is now dealing with business insurance. We are calling for an acceleration of the implementation of the recommendations on the motor insurance side. They are generally good. On the business side, we need the report to be published and the CSO to capture the data so that we know where we stand. We need to start tackling the underlying causes of these increases. The issue of insurance has now become a major economic issue in our country, as well as being a devastating issue for many families who will end up off the road.

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