Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

It is just under two months since the House last debated reform of the insurance sector. In that time, the situation has grown worse. The Insurance (Miscellaneous Provisions) Bill 2022, which was discussed at the time, is a step in the right direction, but it does not represent the radical reform needed to address the cost of insurance. The fundamental issue is cost. We must not forget that affordable insurance is fundamental to the long-term interests of our country. High insurance premiums add significantly to the cost base of the economy. The higher they go, the higher they push up other prices. In the midst of a cost-of-living crisis, that is the last thing the country needs.

No one is any doubt on this topic. The debate on insurance reform is well rehearsed. Time and again, we stand up and agree that premiums are too high and the Minister of State says that reform is under way. However, anything that even sniffs of real reform is often delayed or derailed. In many ways, we are expected to applaud the minor measures that are taken. As a country, we tend not to do radical - I do not just mean in insurance terms - even when radical is something that we need. This is why the insurance market remains dysfunctional, with extremely high insurance costs by international standards. We are complete outliers. When Mr. Peter Boland from the Alliance for Insurance Reform appeared before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, he stated that his members were "met with disbelief - and, in some cases, laughter" from European counterparts over the extent to which insurance remains such an issue in Ireland.

While an action plan for insurance reform has been published, the pace of change has been painfully slow and resistance to meaningful reform seems to be growing. The second implementation report on the action plan, published last March, provided no updated timelines. Without target dates, those actions are little more than aspirations. We all accept that Covid and inflation have impeded progress, but insurance reform has been on the political agenda for years. These unforeseen events have only accelerated the need for reform and they should not be used as barriers.

Policyholders are struggling more and more. A recent survey by the Alliance for Insurance Reform found that 42% of organisations believed that insurance premiums were threatening their future while 90% said that the Government was not doing enough to address the issue. Even the new guidelines used by the Judiciary to decide the quantum of awards for personal injuries have not had the desired effect. While they have had an impact on the cost of motor insurance, which has decreased by 12.1% in the year to the end of March, their impact has been minimal in other areas. CSO inflation data show that home insurance only dropped by 0.5% over the same period and was actually up 3.5% during the month of March, while public liability premiums increased by a whopping 16%.

If the Government wants to protect communities, charities, voluntary organisations and SMEs, then it must address the threat caused by insurance companies exiting an already uncompetitive public liability insurance market. Competition in this market is urgently needed and efforts to attract more market entrants need to be ramped up to drive down costs. Without competition, already struggling businesses will fail, local services will cease operating and communities and voluntary groups will be unable to hold events. In many cases, what makes our communities unique is how the events they hold reflect them. We have been discussing this issue for decades. Too often, events are not held because of the insurance implications.

Since the new guidelines were introduced in April 2021, damages across motor, employer and public liability fell by 47%.

However, insurers did not pass on these savings to their public liability insurance policyholders. While I appreciate that the rise in the number of claimants going to court has undoubtedly hampered efforts, the Government should not be found wanting. An awful lot more needs to be done. I understand that some claimants genuinely feel it is better to go to court, but much of this spike is motivated by the profits legal professionals can garner from dragging claims through the courts. This is why speedy passage of the Personal Injuries Resolution Board Bill 2022 is so needed. However, from reading the general scheme, even this welcome Bill needs to be much strengthened. In particular, meaningfully increasing the number of personal injury claims which can be settled through the Personal Injuries Assessment Board is needed. I hope that the Minister will listen to some of the concerns raised during pre-legislative scrutiny and strengthen its provisions to enable the Personal Injuries Assessment Board to adjudicate on such cases.

Another area in need of reform is duty of care. It has been over a year since the Department of Justice conducted a review of the current legislation and examined duty of care provisions in other countries. The Government’s action plan committed to making proposals to Cabinet to rebalance the duty of care by June 2021, but this deadline was missed. These changes were only approved by Cabinet last month. The current absolutist approach to duty of care obligations places a heavy burden on organisations, regardless of how people act on their premises. For communities, charities, SMEs and event organisers this is an extremely pressing issue but this Government does not seem to share this sense of urgency. One would be forgiven for forgetting that Fine Gael prides itself on being the party of business, given that it has been in power for 11 years and is yet to address this long-running burden on many businesses.

Another long-running burden is the cost of childcare. We are led to believe that it will be a priority for budget 2023 and I hope it is. With the national average price for childcare now hitting €800 per month, and €1,276 per month in Dublin, I sincerely hope that the Government does not renege on that commitment. To cut the cost of childcare, interventions from every angle are needed, including insurance costs. If you reduce the cost of premiums experienced by crèches and Montessori schools, that benefit can be passed on to families. Now more than ever, this saving is desperately needed by struggling families.

The Social Democrats has long argued for the State to do more to promote the concept of co-operative or group insurance. Strong models already exist in areas such as the social housing sector and far more businesses and sport and community groups could enjoy stable and affordable insurance cover if this was promoted. These are the kind of creative solutions that the Government should be pursuing. Simply tinkering around the edges is unsustainable and indefensible. The customer must be at the centre of insurance policymaking, not the industry. Lest we forget, it is customers who have carried the burden of high premiums, while insurers profiteered. Insurance reform cannot be sidelined any longer because everyone except the vested interests loses under the current system.

I want to reiterate the point that was made by some others about flood insurance and the experience with it. I have also had people in my constituency contact me about not being able to sell their homes or about having gone sale agreed before the sale fell through when they realised there was an issue with flood insurance. Some of these were houses that never flooded but where there was a general issue around river catchments. This is a significant impediment. The other thing is that the OPW has done significant work, work which has held up under serious pressure, but we are slow to see a change from the insurance companies. I have had situations where there is no prospect of an area being flooded because it is up on an incline and yet people have struggled to get flood insurance in that kind of scenario. That needs to be tackled from the point of view of people being able to get flood insurance and because of the impacts it has on people if they want to sell as it can be the ultimate impediment.

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