Cian O'Callaghan (Dublin Bay North, Social Democrats)

I thank an Teachta Doherty for tabling the motion and recognise the work he has done this over the years. I also recognise the work the Minister of State, Deputy Troy, has done. We made a submission to him on this and are waiting for the suggestions we made in that submission to be acted on. I recognise the various reforms that have happened over the years.

However, in his comments the Minister of State did not address what is going on in the industry in terms of profits. He is correct in saying that it is an important industry. It is important in terms of employment and is an important part of our economy. However, he did not properly address profits in his comments.

He asked us to give him hard data. I will give him a piece of the hard data he asked for. According to the National Claims Information Database, NCID, insurance companies' profits stood at 13% in 2023. That is more than double the international norms. The Minister of State knows the international norms are about 5%. It is all well and good that reforms are taking place, that there are action plans and there are plans for more things, but profits are at an absolutely unjustifiable level. People need the Government to act now on this.

There is not just an issue with insurance companies in terms of profits but also brokers, which I will address shortly. One insurance broker, Chill, saw its profits increase sixfold last year. That is quite phenomenal and needs to be addressed.

The Minister of State spoke about an industry led approach to solving this. It is no wonder he dodged talking about how to solve the issue around profits because the industry will not come forward with solutions to reduce their profits. The Minister of State knows no industry will do that. In fact, as an Teachta Doherty said, we had promises along the journey in respect of reforms that profit levels would be approximately 5% if the reforms were delivered. There have been substantial reforms and reduced costs, yet profit levels stand at 13%. With respect, after those broken promises to expect the industry to turn around and lead the charge to reduce its profits is something that will not happen. This needs Government action. I agree with the Minister of State on other areas of reform. Industry led reform can be a way of doing things, but to reduce profits in industry is cloud cuckoo land, with respect. I ask the Minister of State to come back to earth on this in terms of how we will tackle these runaway profits.

The motion is being debated in the context of a cost-of-living crisis in terms of housing, rents and grocery prices which are three times the rate of inflation. Meat prices, in particular, have increased. According to Barnardos, four out of ten parents are skipping meals or eating less so they can feed their children. I know the Minister of State is aware of this. It is one reason we need immediate action to reduce insurance costs.

As everyone who has spoken has referenced, the political system has delivered significant reforms. Premiums should be going down and profits should not be going up. Personal injury claims and public liability and car accident claims brought to the Injuries Resolution Board were down 40% between 2019 and 2023, yet in the first half of this year motor insurance premiums have increased by 9%.

The Dublin City Motocross Club is a brilliant initiative, and similar ones have been set up around the country. It was established to provide facilities for young people to engage in a safe way with motocross facilities off-road recreationally. A huge amount of effort has been put in by volunteers over the years. A similar club in Mulhuddart was forced to close in February after a number of years because of skyrocketing insurance costs. My colleague, Councillor Daniel Ennis, has spoken very strongly about what a great facility it was in terms of providing a positive outlet for the people using it to use their energy in a positive way. It was really good for well-being and mental and physical health. However, these kind of initiatives are being closed because of insurance costs and a failure to tackle the increase in profits for insurance companies while reforms have been delivered.

Vincent Jennings from the Alliance for Insurance Reform spoke to the finance committee recently about the impact insurance costs are having on small businesses. He said:

[P]eople [are] paying more than they were five years ago even though those people have not had a claim in five years and have sweated hard to get to that point. It is a cost of business that is unfair. We all understand we need insurance, and we have all paid insurance for all the years, but not at this level and not to fatten up these people who are taking two and a half times more than the European average. The members must be furious; we are furious.

I understand where he is coming from because the alliance, together with the political system, has worked to implement reforms over the years. Yet, it is seeing the costs continue to rise while profits of insurance companies increase. That needs to be tackled.

I said earlier I wanted to address the issue of brokers with the Minister of State. It is part of the equation and requires reform. I again want to quote Vincent Jennings from the Alliance for Insurance Reform who spoke at the finance committee. He said there is no incentive for brokers to get the best quote for their customers and few of them are prepared to do that. He went on to say they are playing the same game and it seemed to him they are at the behest of insurance companies rather than looking after their clients, and that is the truth. That may not be the case for all brokers, but certainly it us the experience that he has had in terms of what he is dealing with that has not been tackled. Brian Hanley from the Alliance for Insurance Reform said it is a curious model that the worse a broker does for a client, the more money they make and as a business model from a consumer's point of view, prima facia, that seems to be unfair. This needs to be tackled.

I am calling on the Minister of State to do several things. In our submission we referred to legal fees, which consume a significant proportion of costs for insurance companies and acting as an obstacle to reduce the cost of premiums. That needs to be tackled. Legal fees for personal injury claims should be capped using the same model used in the District Court.

It is also clear that, despite falling payouts and increasing profits in the public liability market, premiums have continued to rise. There needs to be Government action on this. At an absolute minimum, the Government should be ensuring that the calculations justifying any changes to premiums are published. The Competition and Consumer Protection, Commission, CCPC, should examine the public liability market. Of course, the Government could ask it to investigate why premiums have not come down in line with claims and payouts. Why has the Government not done this?

The insurance link database should not be operated by Insurance Ireland. The data is crucial for potential new entrants to the Irish market and should be readily available to them and operated independently. The Injuries Resolution Board should manage its data in the same way as the Residential Tenancies Board manages data on the rental sector. Those things should be done today. In fact, they should have been done yesterday.

The Government needs to accept and acknowledge that the reforms to date have not resulted in the reductions in premiums that they should and at the same time profits are at unacceptable levels by international standards. The Government must acknowledge that. Does the Minister of State defend profit levels more than double the European norm? I cannot see how he does. If he does not defend that, why is he not acting immediately?

Action plans and minor reforms are all well and good, and we have had significant reforms, but they have delivered an increase in profits that is grossly unfair. It is putting small businesses, clubs, voluntary organisations, residents' groups and community clean-ups under huge pressure, not to mention the massive pressure it is putting on individuals and households.

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