Joe Flaherty (Longford-Westmeath, Fianna Fail) | Oireachtas source

I was in the Chamber this morning when Martin from the usher's team was congratulated on his retirement. I did not get an opportunity to speak then, but I want to congratulate you. You have given exemplary service, as do all the ushers. Twenty-two years here is a long time. If I get 22 years here, I will be very happy, but I think it will be harder for me to stay the 22 years.

I welcome the legislation and commend the Minister of State's work on it. The Bill will provide protection and timely compensation for motor insurance policy holders in the event of an insurer going insolvent. However, there is a genuine concern that the cost-of-living challenge in recent times has helped to mask the insurance sector's stonewall refusal to address premium rates and the postcode lottery when it comes to the cost of insurance premiums in this country.

I was heartened in recent weeks to hear that the heads of all the top insurers had been summoned to explain why they had not cut premiums. I understand they are expected to take action imminently on the cost of premiums. This is welcome and that get-tough approach is needed with the sector.

However, despite a suite of measures and supports by the Government to address insurance costs, the big profit-driven players have simply stonewalled our efforts to pass on premium reductions. Mr. Brian Hanley, chief executive of the Alliance for Insurance Reform, argues that premiums all over the country should have been significantly reduced following a crackdown on payouts in recent years. Instead, as Deputy Nash pointed out, motor insurance premiums have risen for the past eight months in a row. There is a real need for premiums to come down, given the sizeable drop in claims and awards being granted, according to Mr. Hanley. As noted in The Irish Times today, we are heading into nine months of unchecked premium increases despite a 400% reduction in motor and public liability claims since 2019. Every area and every part of this country, including the Garda, local authorities, this House and, specifically, the Minister of State's office, have played their part in driving down costs, in a whole-of-society approach to addressing insurance costs. Just one player refuses to play its part and that is the profit-rich insurers themselves.

In addition, the insurers continue to cling to dated and historic data in order to penalise young motorists, in particular, based on their address. A recent survey carried out by UCD-based artificial intelligence research group CeADAR in conjunction with Idiro Analytics laid bare the sector’s ongoing and totally unjustified penalisation of motorists based on their address. Young motorists in affluent Dublin suburbs pay less for insurance than more experienced motorists from less well-off areas. A driver’s address has been proven to be a major factor for insurers when setting premiums, according to an examination of nearly 40,000 quotes from ten of the main car insurance companies. For example, an experienced 60-year-old driver with no penalty points and living in a less well-off area would be expected to pay up to €338 more for their insurance than a 25-year-old from Glenageary in south Dublin. This makes absolutely no sense at all. Closer to home for me, in Longford town, the average quote for a 25-year-old was €2,164, while a driver with the same criteria and age profile from Crookstown in County Cork would be required to pay less than half of that, with a quote of just €849. Research from UCD states that this is, "the most extreme disparity in car insurance quotes".

Dr. Adrian Byrne, lead researcher for the project, also raised concerns about the use of Al by insurance companies. He questioned whether artificial intelligence is now playing a role in determining quotes based on postcodes. Will the Minister of State confirm whether he has addressed the use of AI in the determination of quotes for premiums with the insurance companies? Dr. Byrne was quoted recently in the Irish Daily Mail as saying:

If car insurance companies are employing Al more and more, they need to guard against harmful bias that may lead them to be non-compliant with the new EU Al Act because data features that are important to their business are also correlated with other aspects of society so can encroach on social determinants of success in life.

European legislation due to be introduced later this year will see essential service providers such as car insurance companies penalised for failing to guard against bias in their Al systems. I understand there are significant fines for companies that breach these new regulations. The Irish Daily Mail article further quotes Dr. Byrne as stating:

There could be unconscious bias through their Al channel because they might not understand everything their Al is doing - aside from the specific outcomes they want [which in most cases is greater profit] - but the Act means they must guard against negative bias. To do that they have to detect it and to do that they need to have processes in place.

The insurance sector continues to penalise regions such as County Longford when it comes to setting premiums, notwithstanding a continual decline in claims. I ask that the Department continue its firm push on the sector to drive down costs. I also ask that the Minister of State and his officials engage with the industry on the rationale for pricing premiums. The Minister of State should confirm whether AI is being used. If it is, we need to be assured that adequate safeguards are in place for the protection of consumers.

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