Jonathan O'Brien (Cork North Central, Sinn Fein) | Oireachtas source

I will move it anyway. We welcome the opportunity to debate this issue and we thank the Rural Independent Group for tabling the motion. However, we felt we had no choice but to table our own amendment to it because much of the motion's content fell into the insurance industry's spin.

I will tell the House exactly what I mean by that. The motion states as fact that insurance premiums are higher because of insurance fraud. I read the report commissioned by the Minister. It went through the committee and that is not what it says. It does not say that insurance premiums have increased significantly as a result of fraud, although I am sure it is a factor. Let us be very clear. One of the reasons representatives of the insurance industry gave for putting up prices was the increase in legal costs and compensation awards but when the committee asked them to provide evidence of that, they failed to do so. We were not able to verify that it was the reason.

The motion from the Rural Independent Group states that the amount paid out by the Personal Injuries Assessment Board, PIAB, across all classes of insurance increased by 50%. That is not true. The report to which I refer indicates that there was a 13.5% increase in the High Court and a 20% increase in the Circuit Court, which is not 50%. The average level of compensation being paid out by PIAB has remained static. That is an important point. Let us get to the nub of this. Why have insurance premiums risen so much? All of the evidence presented to the committee, which I have read, indicates that the main reason for the increase was a failed investment policy. The insurance industry relied very heavily on yield bonds to make a profit but as the value of those bonds decreased to 0%, they had to start increasing prices. It is not just me and the committee saying it; the Central Bank has cited it as one of the reasons for the increase in premiums.

Deputy Michael Healy-Rae said that insurance companies are not Mother Teresa and that they need to make a profit. Let us talk about the profit the insurance industry has made. From 2001 to 2012, it made €3.1 billion in profit. In 2013 and 2014, it made a loss of €334 million. It made similar losses because the trend continued right up to the middle of last year. The CSO indicates that the industry is now turning around but we have not seen data to support it. If we take all of that into account, between 2001 and the present day, we are still looking at a profit for the insurance industry of €2.8 billion. Those are the facts. Premiums have not risen because there is more fraud or higher payouts because 70% of payouts are private. We do not know what the story is with them. There is no transparency in that regard.

I encourage everyone to read the report. The committee did excellent work. Its report outlines some of the reasons why premiums have risen. It also debunks some of the myths continually spun by the insurance industry, which, unfortunately, have found their way into the Private Members' motion before the House, and which led us to propose our own amendment. We will not be supporting the Rural Independent Group.

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