Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy. We are making good progress in implementing the action plan for insurance reform, which is something I am personally committed to. As Tánaiste, I chair the ministerial committee which oversees its implementation and I am determined as the Minister responsible for business but responsible also for consumers to see the cost of insurance falls for businesses, motorists, homeowners and everyone else over the coming year.

The personal injury guidelines are in place, as acknowledged by the Deputy. The Criminal Justice (Perjury and Related Offences) Act 2021 has been passed and will be enacted soon. This legislation will help us to crack down on fraudulent and exaggerated claims. The National Claims Information Database is giving us a treasure trove of information that is helping us to understand in a much better way than we did before how insurance is priced.

The Central Bank report on employers’ liability, EL, and public liability, PL, mentioned by the Deputy is an excellent piece of work. I encourage anyone interested in the issue of insurance to read it. I know that the Deputy has done so. It tells us a great deal more on how insurance is priced and how it works. It is interesting to see, which the Deputy will know from the report, that the average businessperson pays approximately €2,000 a year in EL and PL, and 90% or more of these individuals pay less than €5,000 per year. The profit margin for the companies is approximately 5%, and during some periods these companies are actually making losses. It is important to acknowledge that.

The insurance industry has to reduce its premiums and that is the message that it is hearing from me and from the Minister of State, Deputy Fleming. It is important, however, to acknowledge what was in the report. If one pays €100 in insurance, the profit margin for the company is approximately €5. That, perhaps, was not fully reflected in the Deputies earlier comments. It is interesting to know that profit margin figure for companies. The vast amount of what is paid in insurance used to pay people who have made claims, legal costs, reinsurance and administration costs. Approximately 5% is the margin taken by the company.

There has also been a reduction of approximately 50% in awards by the PIAB for minor injuries as opposed to those for catastrophic or severe injuries, which are different. That is, however, just in the context of two months of data taken from this year compared with an entire 12-month period prior to that. We have no data yet as to what is happening when these cases go to court. Are the judges upholding the amounts awarded by the PIAB or are they increasing these amounts? A little bit more time will be needed before we see that.

Do I expect to see premiums fall? Yes, I do. As the Deputy pointed out in the past, insurance companies work by making provisions for claims that they believe they will have to pay out. It is now reasonable to assume that they have made more provision than was necessary and that, therefore, they should be in a position to reduce premiums and to do so quickly, if not immediately.

As I have said previously, we are completely open to the Deputy’s Bill.

We are giving it consideration. As is the case with any legislation relating to the insurance industry, we are required to consult the Central Bank on it and we will do that.

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