Catherine Byrne (Dublin South Central, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. Debating topics such as this is important, but it is also essential to be clear on the matter of responsibilities. The Minister for Finance is responsible for the development of the legal framework governing financial regulation. Neither he nor the Central Rank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits

member states from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, the Minister is not in a position to direct insurance companies as to the pricing level or terms and conditions that they should apply to particular categories of individuals.

That is not to say that the Minister, or his Department, is not concerned about issues such as that raised by the Deputy. Therefore, Department of Finance officials contacted Insurance Ireland regarding the specific issue which the Deputy has outlined, given the context of the latest consumer price index data indicating that overall average motor insurance costs have decreased by 15.2% since peaking in July 2016. Insurance Ireland responded to the Department’s query as follows:

The premium charged by an insurer is due to a large number of underwriting criteria which determine the nature of the risk and the resultant premium. One of these rating factors would be the age of the person; however, this is only one factor. It would be recommended that the consumer should request a breakdown of the premium for clarification in the calculation of the premium.

Some of the other rating factors used by insurers include the type and age of the vehicle, driving experience, claims record and penalty points of the driver, the number of drivers, how the vehicle is used, and the location where it is normally stored. My understanding is that insurers do not all use the same combination of rating factors - in addition to which, they also price in accordance with their own past claims experience - and as a result prices and availability of cover vary across the market.

In this regard, the Deputy should note that the Competition and Consumer Protection Commission website has an informative section regarding the purchase of car insurance. This can be found on the consumer section of the CCPC’s website. One of the tips listed on the website to help cut costs is to "shop around" and to "always get quotes from several insurance providers when you need to get or renew insurance”. A checklist for "motor insurance shopping around” is also provided.

As the Government is concerned about the matter raised, and sees the importance of keeping the cost of insurance at sustainable but not exorbitant levels, departmental officials will continue to monitor this matter and to discuss same with Insurance Ireland as part as the Department’s ongoing work in regard to the cost of motor insurance generally. The co-ordinating of the implementation of the 33 recommendations from the report on the cost of motor insurance is obviously a key component of this work. It is envisaged that the cumulative effect of the completion of the report’s action plan will be that the current trend towards greater stability in the pricing of motor insurance generally is maintained and that the objective of delivering fairer premiums for all consumers, including older drivers, can be achieved.

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