Dáil debates

Wednesday, 17 April 2019

Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Insurance Industry

10:40 am

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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39. To ask the Minister for Finance the extent to which transparency has been introduced into insurance, pricing motor and business; when the price of business insurance will be readily measurable; and if he will make a statement on the matter. [18015/19]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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The original report of the Joint Committee on Finance, Public Expenditure and Reform focused relentlessly on transparency as a key issue to address in the crisis that we face with many businesses and individuals facing high insurance premiums, yet two and a half years on we hear from individuals, consumers and advocate groups that there is now less transparency in the system not more. A good example of that is that there is no measurement to calculate the cost of insurance for small businesses yet we hear week in, week out of the crisis many sectors face as a result of insurance premiums. When will the situation change?

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael)
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A key recommendation of the cost of insurance working group, CIWG, was to establish a national claims information database. The Deputy will be aware that the Central Bank (National Claims Information Database) Act 2018 was commenced on Monday, 28 January 2019. The required consultation by the Central Bank with regard to the publication of the relevant regulations to outline the scope of the database took place in mid-March and I understand that the bank is finalising arrangements to publish these regulations. The Central Bank plans to collect claims data from insurance undertakings in the first half of 2019, with a view to publishing its first annual report under the legislation in the second half of 2019.

I am confident that, in addition to the two key information reports that my Department has published in 2017 and 2018, the database will considerably increase transparency around the factors that influence the cost of motor insurance. Increasing the availability of data in relation to employer and public liability insurance is also a matter that was discussed by the CIWG and its report on the cost of employer and public liability insurance recommends a number of actions to improve transparency in this area. Recommendation 1 required the Central Statistics Office, CSO, to consider the feasibility of collecting price information on the cost of insurance to businesses, and if it considered such an index feasible, to make appropriate proposals.

The CSO submitted its report to the CIWG in January 2019. While it found that no international precedent exists for such an index, and most price information methodologies it examined were not feasible, it indicated that it wanted to further consider a particular price information method that may potentially be capable of being operationalised. I understand that this method would use a commercially available technology solution to automatically price a high volume of representative profiles, that is, customer profiles such as an office-based company with 20 employees, good safety standards and no claims history. The price quotations for these profiles would be tracked over time to estimate the overall change in premiums.

The examination is under way, and it is expected that the CSO will provide the CIWG with a determination on feasibility during the summer.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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We all hear the anger among small businesses, be they grocers, soft play areas, pubs and retail outlets, at the dramatic increase they face in insurance costs. The committee heard that at first hand. In some cases over a short period premiums have increased by 1,000%. In spite of that, there is no measurement in the State to measure the increase in insurance on small businesses. The National Competitiveness Council produced a report on the cost of doing business and it said insurance costs increased rapidly between 2013 and 2016 but they have been decreasing since then. It said the price of car and other transport insurance is roughly what it was in 2015, in line with the EU average. That is the best the National Competitiveness Council can do on the cost of doing business because it has no data whatsoever on the astronomical increases faced by small businesses, which is putting some of them to the wall. Two and a half years on from all the glossy reports, we have less transparency because we did have a certain degree of transparency. The blue book was published annually by the Central Bank but it has been withdrawn. The private motor insurance statistics were also published but they are no longer available. We have action point after action point but we have less transparency. Businesses are going to the wall because insurance companies can spin and refer to figures nobody else has and nobody can ask them what they are doing and they are putting people out of business because of the astronomical increases.

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael)
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I understand and accept that there is anger. Everything that I am doing is to try to ensure that we give businesses the opportunity to stay in business and trade in the way they should be trading. Deputy Pearse Doherty was correct to say there is no measurement in the State. There is also no measurement internationally for what we are trying to do. The CSO came to us last January with a number of options. We considered that four of them were not feasible as we could not make them operational. The CSO is to report back to us over the summer months with a structure that we believe we can apply and put into operation. I will not tell the CSO how to do it. It has the best people to do it.

I will not pretend that the insurance companies are white knights. They have been unhelpful in terms of how they hold their information. Deputies Pearse Doherty and Michael McGrath are aware of that from their interactions with them in the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. We are doing everything we can to try to ensure that small and medium enterprises the length and breadth of this country get a fair pricing structure and regime from insurance companies.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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I hear what the Minister of State says and I take it at face value but the reality is that we have less transparency now within the system. The blue book and the private motor insurance statistics, PMIS, should have been published in recent years. We should not allow the insurance industry to do what it has done, namely, allow our agencies to take away the little transparency that existed. This is the same entity that was investigated in dawn raids by European authorities because of its cartel-like behaviour. It is the same entity that is refusing to insure soft play areas the length and breadth of the State. We will see them close down one by one. An entrepreneur in the soft play area broke down before the committee as she had put her ambitions and hopes into her business and she will be out of business because no insurance company in the State will insure her. They say it is too costly and we cannot dispute that because no data are available. The reality is that the national claims information database is a closed book that only gives information to the industry, and only on claims, not costs. The Alliance for Insurance Reform said that confirms its view that official Ireland is in no hurry to resolve this crisis despite the damage insurance costs are doing to small businesses. Unfortunately, it is right, because there is a lack of urgency and a clear lack of transparency which is affecting jobs and businesses to a considerable extent.

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael)
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Anybody who says there is no urgency in relation to insurance is wrong. Deputy Pearse Doherty is wrong. It is very rare but everybody in this House, the other House, those in government and in opposition, is putting his or her shoulder to the wheel to try to rectify the insurance sector. I have complimented every Member in this House and in the other House for the co-operation that exists on insurance. I do that on all occasions because it is fair and right. Everyone wants this matter concluded but the biggest issue remains to be addressed, namely, the level of awards. The Judicial Council Bill has moved from Committee Stage in Seanad Éireann to Report Stage.

I mixed up the date on the last occasion, saying that it would be done before the end of March. The matter moved back into the Seanad on 2 April. I have set a date by which I want to achieve this, and it can be achieved with the help of the Members of the Houses, by getting the judicial council Bill through Seanad Éireann and Dáil Éireann prior to end of the summer session. I have asked for an early signature motion on this so that we can move towards the establishment of the judicial council and allow for the establishment of a committee to consider personal injury assessment guidelines for that legislation.

This is crucial legislation and will impact on awards. High awards mean high premiums. I am asking that the Committee on Finance, Public Expenditure and Reform, and Taoiseach, before we conclude the legislation in both Houses, asks all the insurance companies to appear before it. The committee should put hard questions to those companies if we do our bit to put the structure and legislation in place to allow the re-calibration of the book of quantum guidelines in line with the recommendations of the personal injuries commission. I will do it in private, but I am asking the Committee on Finance, Public Expenditure and Reform, and Taoiseach, to do it in public.