Robert Troy (Longford-Westmeath, Fianna Fail)

I apologise for being late but this debate came much earlier than any of us expected. I welcome the opportunity to speak to this House on the motion concerning insurance in the context of cost of living. This is an issue of immediate and real relevance to Irish households, to our small and medium enterprises and to the long-term competitiveness of our economy.

I would also like to commend Deputy Doherty on his work to date. He has been a very strong advocate in this regard, but he has not been alone on this issue. I thank him for tabling the motion today to give us an opportunity to discuss this issue and give me an opportunity to outline the work that has been done by this and previous Governments because outrage alone will not solve this issue. Significant work was done by the previous Government and I will update Deputies on progress.

Insurance is a framework that enables people to drive, open businesses, buy homes, employ staff and invest in the future with confidence.

When cost becomes unpredictable or excessive, it places pressure on every family budget and on every business plan. It is, therefore, important to outline what the Government has achieved to date, the evidence base on which we are acting, and the roadmap we have set out in the new action plan for insurance reform to enhance transparency, affordability and availability of insurance.

I will begin by highlighting the progress that has been achieved. When the Government introduced the Action Plan for Insurance Reform 2020, there was recognition that deep structural issues were driving Irish premiums above international comparators. Legal costs were excessive, personal injury awards lacked consistency and transparency was poor. Through previous reforms we have implemented fundamental change, including the rebalancing of the duty of care, reform of the Injuries Resolution Board, the introduction of the personal injuries guidelines, and enhancements to the National Claims Information Database, NCID. These were not small reforms. They represented a comprehensive restructuring of how the Irish insurance market operates and they are now yielding measurable results, not that Deputy Doherty will give any credit for what has been done.

We can see this clearly in the behaviour of the motor insurance market. I acknowledge that premiums had begun to increase in the past 12 months, but premiums in Ireland have fallen by around 34 points since 2016, even allowing for the recent increases. Today, the average private motor premium is €630, compared with £777 in Britain and £834 in Northern Ireland. I do not hear Deputy Doherty referring to this. This difference matters. It represented a shield for households and businesses in a period when costs elsewhere in Europe were rising due to inflation and supply chain shocks. Our focus is now on ensuring that the increases we have seen in the past 12 months are reversed.

We also see improvement in the composition of claims costs. In 2019, personal injury costs made up 72% of total claim cost, while material damage accounted for only 28%. Today, these figures have shifted, and personal injury accounts for just 44% while damage accounts for 56%. This shows that reforms have directly reduced the weight of personal injury claims in overall settlements. These structural reforms have provided what is commonly known as a shielding effect. They did not eliminate pressures entirely, as repair costs and severe weather events all add to premiums, but they prevented those pressures from being much worse. Without reform, Irish motorists and businesses would now be paying dramatically higher premiums.

Despite the tangible impact of the Government's reform agenda, the NCID has been instrumental in shining a light on where challenges remain. The latest NCID report for the first half of 2024 provides compelling evidence that for private motor claims under €100,000, litigated cases are some 22 times more costly than using the IRB, and take over twice as long, resulting in only a 1% higher level of compensation. For public and employer liability, the challenge is even greater. Around 70% of claims still proceed through litigation, and legal costs can amount to 40% of the total settlement in public liability. These inefficiencies feed directly into higher premiums for businesses. Unless we tackle this head-on, which we intend to do, the litigation model will remain a heavy drag on affordability.

Let us look at the future. On 24 July the Government launched the Action Plan for Insurance Reform 2025-2029. It contains 26 actions across six strategic themes, namely, transparency and affordability, competitiveness and availability, tackling fraud, innovation and skills, the climate protection gap and legal reform. Ten of these actions are designated as priority measures because they will have the greatest immediate impact on affordability and transparency. Deputy Doherty is aware that a significant public consultation was carried out in advance of drafting this action plan, and I would like to point out that no submission was made by Sinn Féin, in contrast to submissions being made by other political parties. I am aware of the Deputy’s Bill, and I do not for a minute doubt his sincerity on the issue, but where is the data to point to the Bill actually delivering the reforms or savings he says it will?

Our insurance sector employs over 35,000 people. This is something to which he never refers. He always calls for outrage but never refers to the critical importance of the insurance sector to the economy. We want to ensure any new measure introduced does not have a negative impact on our ability to attract new participants into the market. This is why data is critical. This is why this Government is engaged with the industry and the Central Bank to gather the relevant data to ensure we make the right decisions. I say quite openly that if Sinn Féin has material that would help in this regard, I am all ears. Deputy Doherty is aware I am all ears and prepared to take on board his claims if he can back them up with hard data. As I said, he had a prime opportunity to be involved during the public consultation phase but neither he nor his party made a submission.

See this speech in context