Wednesday, 13 March 2019
Business Insurance: Motion [Private Members]
I support this motion and commend Deputy Michael McGrath on bringing it forward. Anybody who has served as a director of a company, particularly in the past ten or 15 years, knows the way insurance costs have escalated and made it more difficult for us to employ people and to defray the kind of basic costs of running any kind of business in the community or in the commercial sector.
The objectives of the motion are particularly noteworthy. I refer to: the national claims information database inclusive of public liability and employer liability; legally obliging insurance companies to notify policyholders of claims made against them as claims are made - one would think that would have been standard and in statute for a long time; the PIAB updating the book of quantum - we have had many discussions about the book of quantum; a dedicated Garda fraud unit; and an insurance fraud unit funded by this Oireachtas through the budget. Those objectives and the other aims in Deputy Michael McGrath's motion should be implemented.
I also commend Sinn Féin on its amendment which asks insurance companies to reduce premiums in conjunction with the reforms being introduced.
The Minister of State was speaking about this matter yesterday and it is almost like Groundhog Day in this Dáil when it comes to insurance. On 21 March last year, almost exactly a year ago, we debated a Fianna Fáil motion and Sinn Féin amendment which called for the implementation of the 15 action points in the report of the cost of insurance working group on employer and public liability insurance. That would have obliged insurers to provide a breakdown of the premium cost to the business, give us more information and ensure that the book of quantum of the Personal Injuries Assessment Board, PIAB, would, at long last, be updated at least once every three years. We are going around in circles with this Government.
Last year's motion also called for the deadline for the feasibility study on including employer liability and public liability data on the national claims information database to be brought forward from the fourth quarter of 2019. Perhaps the Minister of State will address that specific point and provide an update, although perhaps he did already because I missed his introductory speech.
We should work towards creating a single European market. We have just had a discussion with the European Commission in the Committee on Budgetary Oversight on the European semester. It has often been asked by all sides of the House why, when we get some of the downsides of European membership, we do not get more of the upsides. Deputy Michael McGrath has consistently highlighted issues around interest rates and mortgage rates but there are also issues relating to insurance.
We called, exactly a year ago, for the Department of Finance and the CSO to report on the creation of a price index for employer and public liability insurance premiums and my colleagues have spoken very eloquently about that earlier. Why has another year gone by and insurance costs keep escalating? There are issues to do with databases, books of quantum, fraud and so on. Why has the Government not addressed them? It is a particular hallmark of this Government that Ministers - for example, Deputies Eoghan Murphy and Bruton - announce grandiose plans for climate change, housing, education and so on, but there is no action or delivery of the first necessary action. It would be better to take one or two of the measures the motion calls for and actually progress them.
The Government should be working with Fianna Fáil to bring forward real action on this. The whole House is ad idemthat we need to address these problems in the insurance industry and particularly how they impact our constituents.
Towards the end of 2016, there were reports that insurance fraudsters from the UK were coming to Ireland to cheat the system because they get much higher payouts than in the UK. Colleagues have rightly referred to this. There was a particular case in that era when the book of quantum payment in Ireland for a broken femur was over 300% higher than the UK award. In the book of quantum, the awards for minor whiplash injuries can be anything from €16,000 to €20,000; for moderate injuries, the figure is €20,000 to €30,000; for moderately severe, the figure is €30,000 to €52,000; and severe and permanent whiplash injuries command awards of between €44,000 and €78,000. It is quite clear that the book of quantum has to be addressed and that is something many Deputies have been saying for years.
There is very little appetite in the legal profession to introduce and implement the reforms needed. It could be said that some close friends of the legal profession in Seanad Éireann are holding up much-needed reform of the judicial appointments system. The legal costs associated with claims is a particular problem. We need urgent reform in this area.
The profitability of insurance companies is very high. At the beginning of March this year, it was reported that the main insurance companies in the country made more than €200 million in profit. Chambers Ireland, which regularly briefs us about business matters, published a cost of insurance survey in August-September 2017 which showed that 43% of respondents had an increase of between 5% and 20% in their premiums, some reported increases of 50% to 100% and others said they had increases of more than 100%. These are the actual bills that a business owner is faced with from his or her accountant or auditor, year on year, and it is a significant deterrent to having an efficient and progressive business. The brokers justified those increases at the time, according to Chambers Ireland, by referring to market conditions and an overall increase in claims but there is a dearth of information. The information gap in this sector upsets people most of all. There are some valuable data available from the CSO and PIAB which deduced that, between January 2011 and July 2016, insurance costs generally rose by 57% and that approximately 42% of non-motor PIAB applications relate to employer liability and public liability insurance, with increases of 15% and 20%, respectively, at a time when Ireland was in a severe recession.