Paul Murphy (Dublin South West, RISE) | Oireachtas source

Listening to the Minister of State, Deputy Fleming, earlier I was struck by his focus not on the rip-off of ordinary people by the insurance companies, which is going on, but on the words "dual pricing". He seemed to be very offended by the words and insisted we must call it differential pricing instead. One may call it what one likes: differential pricing, flexible pricing, multiple pricing, variable pricing or indeed dual pricing, which is in fact what the Central Bank calls it. The Central Bank uses the term interchangeably with differential pricing. In a press statement on 14 December last year it said, "Dual pricing is evident across the private car and home insurance markets, where new and renewing customers are charged different premiums for reasons other than risk and cost of service."

However, in plain terms, no matter what one calls it, it is a rip-off perpetuated by the insurance companies. It is about insurance companies targeting those customers who they think are less likely to be able to shop around and hitting them with higher premiums. Older people and more vulnerable customers are the most common victims. The insurance companies do this using big data and obscure pricing models to make it so that victims do not even know.

The Central Bank estimated that seven in every ten insurance customers are being charged more than the actual cost of their insurance as a result of this practice, thus netting the insurance companies more than €180 million extra.

Instead of a Government which covers up the practices of insurance companies and distracts from them, we need a left Government which stands up to the big insurance companies and bans dual pricing. The simple truth is that the major insurance companies are ripping people off and the Government is letting them get away with it. More than a year ago, the Central Bank highlighted that the average cost of motor insurance had risen by 42% despite a 40% drop in the number of claims. What we have seen is a massive rise in profits of insurance companies. Those same big insurance companies have caused crises in community centres and crèches by denying them cover. In the case of small businesses hit by the pandemic, the insurance companies have dragged their heels and tried to avoid paying out.

We cannot leave the insurance industry to those vultures. It should be run as a public utility in public ownership and as a service for people, not an extortion racket for the insurance companies' investors. This whole issue highlights the lie that the model of free market capitalism is somehow efficient. For whom exactly is it meant to be efficient? It is not efficient for the worker who may have to spend a working day each year shopping around, looking for different insurance products and trying to find the best possible price. It is not efficient for older persons who may not use the Internet and are, therefore, left absolutely vulnerable to this complete rip-off without having any knowledge that it was perpetrated on them. It is efficient only for the insurance companies which utilise the mass of information that should be at our disposal as a society and could be used to benefit ordinary people but, instead, is only used to rip people off.

I refer to the increase in profits in the insurance industry. Data compiled by the Central Bank show that Irish insurance companies made profits of almost €3 billion between 2002 and 2016. Profiteering is at the root of the massive jump in insurance premiums in recent years rather than the increase being down to the magician's trick the insurance companies try to pull of pointing towards fraudulent claims.

I remember an interesting meeting of the finance committee at which the deputy governor of the Central Bank acknowledged that the presumption that encouraging more competition will automatically lower costs is an act of faith. It is simply an act of faith that has no basis in fact or the evidence we have before us. Instead of endlessly waiting for the invisible hand of the market to work its magic, the solution is for the State to nationalise the insurance industry and bring it into democratic public ownership to provide motor and home insurance as an essential public utility. The State should assume the responsibility to provide insurance as an essential public utility on a progressive and non-profit basis that takes account of people's ability to pay and ends the systematic discrimination against many groups of people, including young people, older people and those on low incomes.

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