Pearse Doherty (Donegal, Sinn Fein)
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60. To ask the Minister for Finance if he is satisfied that the insurance sector is providing insurance pricing that reflects the fall in the number and value of claims since the introduction of the personal injuries guidelines; and if he will make a statement on the matter. [11518/23]

Pearse Doherty (Donegal, Sinn Fein)
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The new personal injury guidelines came into effect in April 2021 and the reforms were introduced to reduce the price for consumers, not to generate the savings and boost the profits of the insurance industry. There is growing frustration that the benefits of these reforms are being captured by the insurance industry and the companies, rather than being passed on to consumers and businesses. Is the Minister of State satisfied that the current pricing by insurance companies reflects the reforms that have taken effect in recent years?

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank the Deputy for the question. As he correctly said, the personal injuries guidelines were adopted in April 2021. They represent a central plank of the Government’s insurance reform agenda. Recent data from the Personal Injuries Assessment Board, PIAB, indicate that the overall average award has fallen by 38% compared with awards made in 2020 under the book of quantum. Given the pace of reform, and the many other measures being implemented, it is necessary for the insurance industry to pass on benefits to its hard-pressed customers. As the Minister of State with special responsibility for insurance, I am currently involved in an intensive round of meetings with CEOs of insurance companies and am pressing this specific point with them.

It is important to note that the impact of reforms can take time to transmit to price levels for a variety of reasons. These can include uncertainty arising from ongoing legal challenges, as the Deputy will be aware; the inherent complexity of the insurance sector’s operating environment; or even dynamic, external developments which can determine price or supply in a small market such as Ireland. Notwithstanding these, what I can confirm is that domestic policy action has been clearly targeted at delivering real and sustainable change benefiting policyholders. In that regard, I welcome recent consumer price index, CPI, data from the Central Statistics Office showing that the price of motor insurance in January 2023 was 9.1% lower than in January 2022, 16.1% lower than April 2021, when the guidelines were implemented, and 43.7% lower than its peak in July 2016.

This is particularly notable as the same CPI data showed that the general rate of annual inflation was 7.8% in January. I know the Deputy has had difficulty with Central Statistics Office statistics in the past, including the last time we discussed this matter, so it is important to say that the fourth national claims information database, NCID, private motor report gave some initial insight into the impact of the guidelines on awards, which was broadly in line with the data released by PIAB. There is read-across there. The NCID continues to be enhanced and will provide more frequent information on premium levels from this year onwards, further enabling us to monitor the impact of reforms.

Pearse Doherty (Donegal, Sinn Fein)
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It is two years on. I remember the Minister of State's party leader, Deputy Varadkar, saying that he would give the insurance companies six months or else. We now hear the Government saying the same thing about the energy companies. The Minister of State with responsibility in this area is now basically giving the pitch the insurance industry gave immediately after the reforms, which is that this is going to take a long period to implement. It is two years on. Awards have fallen by 38%. The number of cases going through the High Court has fallen by two thirds. According to the national claims information database report for 2021, which looked at 2.1 million premiums, insurance premiums dropped by 2%. The evidence we can see from the Alliance for Insurance Reform information and the anecdotal information we are getting is that prices are going back up again. The companies themselves told us that, if we were not seeing premiums reduce by 20%, we needed to ask serious questions. I have been asking these questions. We have proposed legislation that would enforce transparency on the insurance companies and make them show that they are passing on these reductions.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I reiterate the statistics I have mentioned. The price of motor insurance has fallen 9.1% in a year while inflation has been rising. I know the Deputy does not accept that and that he does not accept the CSO data but those are the data available and those are the statistics we have. I have seen it in my own insurance premium and in those of my constituents. These are the figures. They are 43% lower. However, the Deputy is quite right to highlight the current inflationary environment and the difficulties being experienced. Although premiums have fallen at a time of rising inflation, we have inflation in the price of labour and materials. I worry these increases will have material impacts on premiums. We have to monitor that very closely and take every step we can to ensure that inflation is reduced in every possible way and by every metric. This feeds into everything and it is very important to highlight it. I do not agree that the Deputy's Private Member's Bill would provide additional transparency. It fails to take into account the essential role of the national claims information database and the work it does.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister of State would not agree because it is very clear from what she is saying that she is going to take very little action. Two years on, claims and awards have fallen dramatically. Does the Minister of State know what has gone up? It is the profits of the insurance industry. The industry combined made €176 million in 2021, which is a 13% increase and the highest figure in a decade. That is what is happening. The industry is laughing because the Government is not going to take any action. Across the water, when awards fell, the Government made sure that the insurance companies were not pocketing the benefit but passing it on to consumers. Motorists, businesses, community groups and sporting organisations are being fleeced. There has been no reduction there whatsoever. We need the Government to act. I have legislation. I am happy to work with the Minister of State to amend it but it requires transparency. It requires the insurance companies to show, through audited evidence, that they have passed on the benefits of the reforms passed in this House. When awards are reducing, we expect the benefits to be passed on to consumers rather than to be pocketed by the industry.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I agree with the Deputy in that regard but I will go back to my point about the Private Member's Bill. In essence, it duplicates the national claims information database.

Pearse Doherty (Donegal, Sinn Fein)
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No, it does not.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I am afraid it does. The NCID has been enhanced to collect additional data following the introduction of the personal injury guidelines. The fourth private motor report, published in November 2022, shows some initial data on the guidelines up to the end of 2021. This will be developed in future reports. As Minister of State with special responsibility for insurance, I have engaged with PIAB to see how things are going and to work out any process issues it is facing, if any. This is a very practical implementation of an action plan on insurance reform that has whole-of-government support, has delivered very meaningful change in the insurance landscape, has reduced premiums and has brought about a better stickiness of awards at PIAB. We have to stick with it and see it through all the way.

Pearse Doherty (Donegal, Sinn Fein)
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It benefits the insurance industry.