Alan Farrell (Dublin Fingal, Fine Gael)
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That was terribly efficient; it was like a nightclub at 2 a.m. for a moment. I thank the Ceann Comhairle for his forbearance on this Adjournment matter, which was tabled last week but directed to the incorrect Department. I thank the Minister of State, Deputy Eoghan Murphy, for taking the issue and I congratulate him on his appointment. The purpose of this Adjournment debate on insurance premiums is primarily to highlight something which has been in the public domain for several months following annual increases in insurance premiums across the board. The CSO's consumer price index for April of this year shows that, across many different sectors, the cost of insurance premiums has increased in the past month and the past year. Nowhere is this increase more evident than in the motor car insurance sector, where in the 12 months up to April 2016, there was a 34.5% increase. In fact, there was an increase of 3.4% in insurance relating to motor cars in the month between March and April 2016 alone. Many questions must be asked of the insurance industry as to how it can justify such an increase in one year alone. It is difficult to believe it is plausible that such an increase benefits the consumer impacted, and for this reason I believe it is warranted that the Government establish an investigation, primarily through the Department of Finance, into the insurance industry in this regard.

While the motor insurance sector has seen the most significant increases in the past year, it must be noted that, from what I could determine, all insurance categories, apart from health and travel insurance, increased. Health insurance decreased by 0.5%, which is negligible, and travel insurance decreased by almost 6%. Insurance connected with the dwelling rose by 10%, motor car insurance increased by 34.5% and motor cycle insurance increased by 6%. On the basis of the increase in insurance costs, it would be wholly justified for the Government to establish an investigation into the insurance sector. This could be done by the Department of Finance, the Department of Jobs, Enterprise and Innovation or the Competition and Consumer Protection Commission, and I will leave this matter for the Minister of State to determine. We must ensure that customers get the best value for money while receiving comprehensive protection.

The question must be asked as to whether insurance companies are operating like a cartel. For example, in 2015, Aviva Ireland had its best performance in five years, according to its chief executive. As reported in its financial results, Aviva Ireland's operating profit, excluding non-insurance activity, stood at €91.2 million. This is an increase of 32% on the €69 million operating profit which existed in 2014. In fact, Aviva acknowledged that its general insurance business gross written premium grew by €48 million year on year while its customer numbers grew by 6%. This is not to draw attention to one company specifically, but merely to use it as an example. Another example is RSA, which RTE reported reduced its operating loss in its Irish operations from £97 million in 2014 to £26 million in 2015. This morning, I received a particular example from a constituent in Swords. A 37 year old male with eight years no claims bonus and three penalty points received a renewal quote from FBD for €445 in 2015, and his insurance renewal quote this year was 90% higher, at €845. Since that correspondence, the company has offered an intermediary level of €745, which is €100 less. This is a paltry gesture given the 90% increase.

David Barniville, senior counsel and chairman of the Bar Council, wrote an article in The Irish Timeslast Friday. Ironically, if the Adjournment debate had been taken last week it would have informed the article a little more. He highlighted the issue I have just outlined with regard to legal costs. I have done a great deal of research, which I will happily give to the Minister of State, which indicates legal costs have increased by only 1%, so the justification the insurance industry is giving is completely erroneous, with 35% in one example.

The Government levy increases premiums and I accept there are other capitalisation issues, but the Book of Quantum of InjuriesBoard.ie, which was established to reduce costs for the insurance sector and the end user has not been updated in almost a decade. It is in the process of doing so, which is a welcome step. The problem is the insurance industry will not share information with the injuries board and it cannot make a determination which will ultimately lower costs.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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I thank Deputy Farrell for his comments and for raising this important issue this evening. I welcome the opportunity to discuss the issue of insurance costs. I am aware of the concerns of Deputy Farrell and concerns throughout the House about the increasing cost of insurance. It is an issue of concern for individuals, households and businesses throughout the country.

Consumers, be they individuals or businesses, need to have access at a reasonable cost to the insurance products they require. Healthy competition within the insurance industry should facilitate this, and with regard to competition, the National Competitiveness Council has emphasised that a resilient and well-functioning insurance sector contributes to economic activity and financial stability.

It is important that Ireland has an insurance sector that is not only financially stable but contributes to economic activity. The insurance sector makes a vital contribution to the Irish economy, through employment, attracting global capital and serving the needs of consumers.

In general, a number of factors drive the cost of insurance. Differing reasons have been put forward by various interested parties to explain Ireland's increasing insurance costs. Motor insurance, as the Deputy pointed out, appears to be particularly affected, with the cost of premiums increasing by more than 34% in the past 12 months.

To examine these issues in more detail, the Minister for Finance has asked his officials to undertake a review of policy in the insurance sector. This is being undertaken in consultation with the Central Bank of Ireland, other Government Departments, agencies and interested bodies. The objective of the review is to recommend measures to improve the functioning and regulation of the insurance sector.

The first phase of the review, which is nearing completion, is concentrating on an examination of the framework for motor insurance compensation in Ireland after the failure of Setanta. This work is being conducted by a joint working group comprising officials of the Department of Finance and the Department of Transport, Tourism and Sport. The outcome of this work will feed into the wider review of policy in the insurance sector.

The availability of relevant and timely data to facilitate an in-depth analysis of the issues is also a matter to be addressed in the review, as the current lack of data presents difficulties from a policy analysis and development perspective, and the Deputy referred to this in his contribution. As the National Competitiveness Council report on insurance states, it is important to obtain data forensically because so many elements contribute to insurance costs. The Department of Finance is working closely with the Central Bank of Ireland and has met a number of stakeholders, including the Department of Jobs, Enterprise and Innovation and the injuries board. The Department of Jobs, Enterprise and Innovation has advised that the injuries board expects to have the revised Book of Quantum ready as soon as possible. While the review will examine the issues, it then will be necessary to approach the relevant areas to ascertain where improvements can be made that can feed into reducing the cost of insurance.

It is important to note it will continue to be the case that insurance premiums will be priced individually by insurers, which use a combination of rating factors in making their individual decisions on whether to offer cover and what terms might apply. While insurance premiums cannot be directly influenced, and the Government cannot interfere in how insurance companies price their insurance products, this does not preclude the Government from introducing measures that could, in the longer term, lead to a better claims environment that could facilitate a reduction in claims costs.

Officials will continue to work on the review of policy over the coming months and the work is expected tobe completed by the end of this year. I would very much appreciate the opportunity to examine with the Deputy his research and the figures he has shared with the House and submit them to the ongoing review, if it will help in its work, and in completing it as soon as possible.