Gerald Nash (Louth, Labour) | Oireachtas source

I am pleased to support this Bill. I will support any legislation or intervention from any Member of this House regardless of their political colour if it means that insurance premiums will be reduced for hard-pressed consumers in this country. We cannot wait another nine months for this issue to be addressed. I believe in the Minister of State's intentions. He is well intentioned in the approach he wishes to take with the insurance industry. Ultimately, that has to deliver, but we cannot waste any more time. We have to take any interventions that are made in this House seriously. We must try to take a consensual and unified approach to dealing with this very significant issue for Irish consumers, jobs and business.

For years insurance companies promised us that we would see a reduction in premiums if court payment awards went down. While it might be early days, there is little evidence to suggest that premiums have gone down since the Judicial Council guidelines came in. In fact, there is evidence that I have come across in my own day-to-day work where some companies are just shifting the goalposts and introducing new criteria and thresholds to keep their profits up. This is the kind of activity that the Minister of State needs to keep a very close eye on, as do the Central Bank and the Competition and Consumer Protection Commission.

All of this comes on the back of insurance firms, particularly those in the motor insurance market, refusing to grant rebates to their customers like they did at the start of the pandemic, despite the significant reduction in road usage and, as a consequence, claims in the early part of this year. This foot-dragging on premium reductions and rebates is simply unacceptable, but our experience of the insurance industry in this country means we should not be surprised. This is an industry with form. We all know that excessive awards were a problem to which the State responded but this was only part of a much larger problem. The reality, as was stated earlier and as we have been told by the Competition and Consumer Protection Commission, is that motor insurance premiums increased by up to 35% between 2009 and 2019 while claims costs per policy fell 9% in the same period.

At the same time the operating profits of these price-gouging firms have continued to rise, for example, by 10% in 2019, while premiums have fallen by only an average of 4%. To add insult to injury, insurance companies are effectively pocketing State supports to businesses that the Minister of State and I, as taxpayers, are paying for. I refer to supports that all of us in this House legislated for. These companies are like the archetypal Second World War spivs, but in more expensive suits, who are trading off people’s misfortune and exploiting a crisis to line their own pockets.

At last week's meeting of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, my Labour Party colleague, Senator Sherlock, challenged the FBD, Aviva and Zurich insurance companies on this extraordinary situation, which is happening in plain sight. I have raised this with the Minister of State before, as have others, but it goes on.

Insurance companies are obliged by law to reimburse the State in any personal injuries awards in respect of any welfare payments that may have been made to the injured party. Despite the Minister of State's bellicose words on the airwaves, they get to make up their own rules when it comes to the treatment of business interruption insurance.

Only last week, we saw the State’s biggest general insurance provider, AXA, stating it intends to deduct the value of pandemic State supports from payouts to businesses. They really have some neck and they need to be taken on.

The Minister of State has rightly said it is not the job of the Government to subsidise the profits of the insurance companies, but he has a responsibility to call a halt to this travesty.

The issue of insurance cover for businesses is a ticking time bomb as we move to the recovery phase of our economic development, we hope, post Covid. In recent weeks, I have witnessed more and more insurance companies simply refusing to provide cover to businesses and, in some cases, even to firms that have never claimed. They have no history of claims or of issues whatsoever. Last week, Engineers Ireland spelled out in stark terms how the housing crisis could deepen because fire experts cannot get the proper insurance to allow them to sign off on individual houses, flats, nursing homes and entire housing estates.

I am dealing with a shocking case in County Louth. I will not identify the individuals involved but I mention this because it is illustrative of a wider problem. A firm that employs almost ten people in the outdoors sector has, in effect, been closed because it cannot get standard insurance cover. It is cover the firm has had since it opened, without a single claim having been made in the history of its operation. The jobs are at risk of going. This is an entrepreneur who has made it through the pandemic, only to be shown the door by an insurance company. Two issues have been cited, one of which is Brexit and the fact that there are difficulties with the underwriters, which are UK licensed and finding it difficult to operate in the EU. The second issue is the nature of the firm's business. I reiterate it has had no claims made against it and it operates to the highest safety standards, as its record shows.

If not tackled, this issue will stymie our recovery and put hundreds, if not thousands, of good businesses and good jobs at risk and out of operation. Today, the Government launched its national economic recovery plan. Many of the initiatives outlined therein are simply rehashed initiatives that have been lodged in any case since the Government came into office, although it would be churlish of me not to recognise that there are some positive initiatives in the document, notwithstanding the criticisms I have of some elements of it. Nevertheless, there is one step that would greatly enhance the prospects of businesses' viability, namely, tackling all these deep-seated inequities and injustices in the insurance sector and the way in which businesses are treated.

The shocking case that I outlined I am dealing with is illustrative of a wider problem. We have a fundamental market failure in insurance in this country and it is holding back our economic development and our society. Where there is market failure, an activist State ought to step in. We recently proposed the introduction of innovative pooled insurance schemes, the norm in other EU countries, which would allow community services such as childcare centres, co-operatives and sports clubs to group together under one policy to secure significantly cheaper premium and to spread and share the risk. That is normal elsewhere, but we do not seem to be able to do it in this country. We have also called on local authorities and education and training boards, for example, to use their ownership of Irish Public Bodies Mutual Insurance to extend cover to community events and festivals, which will be absolutely necessary if we are to help our vibrant arts and entertainment sector bounce back from the pandemic.

The State must step in actively to reshape the insurance market in the interest of customers, communities and local businesses. In the meantime, we are happy to support this initiative, designed as it is to force down premiums. We will support any initiative, regardless of where in the House it might come from, that is designed to achieve what we all want, namely, reduce premiums and costs for businesses, save jobs and give consumers a fair crack.

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