Kieran O'Donnell (Fine Gael) | Oireachtas source

I welcome the Minister of State, Deputy Eoghan Murphy, and compliment him on the work he has done in this area. There are two reports on the issue, the first of which is the report of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. The Minister of State also produced a report for his Department. Many of the points we had raised fed into the final document produced by the Department.

It goes without says this problem has some key features. First, we really do not know what happens with 70% of claims since they are settled outside the courts and the Personal Injuries Assessment Board. Second, there is no database. Certain insurance companies have internal databases that they use, but there is no transparent public database to allow people to see exactly how premiums are arrived at or how risks are factored into premiums. The book of quantum needs to be updated far more.

I note one feature that we found when we worked on the report of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. I note that the clerk to the committee is in the Visitors Gallery. The myth was that the only reason motor insurance premiums were increasing was the making of exorbitant awards and legal fees. That was the sole reason proffered, but we found, when we drilled down, that this was not the case. Are these factors? Yes, they are. Are they the primary factors? No, they are not. The report makes for interesting reading. It found that the appeals court had been established to enable insurance companies to appeal to a higher court. In essence, a special court was set up and, effectively, the associated rulings formed precedents. We found that in the previous six or 12 months awards were for significantly smaller amounts than those granted in the courts, yet there was no correlation in a fall in motor insurance premiums. The insurance companies maintained that the size of awards and legal fees were the primary contributory factors. However, that was not borne out by the empirical evidence during the previous six or 12 months. In many cases, routine awards were falling by one half. I did some forensic work on the matter. That was something about which I felt strongly.

I made a presentation at the Limerick Seniors Forum a week ago. It had organised a seminar for older people on the motor insurance industry. I had to read through the reports and look at the up-to-date position. They made for interesting reading and the feedback from the older age groups was interesting. I am referring to them as older age groups rather than in any other way.

A feature of the industry is how the industry players are shifting the goal posts once again. The danger is that this is what they will continue to do. Two particular cases stand out. A man had a claim against his insurance policy approximately two years ago. His premiums went up marginally in the past two years. However, this year in the initial quote it went from €500 to €1,300. He was operating through a broker who eventually got the figure down to €1,100 with the same company. I decided to do some forensic work. We went through all of the insurance company websites to see whether we could find a lower quote. The answer is that, systematically, all of the quotes were higher. We went directly to the company with which the man in question was insured and found that it was charging a premium far higher than the broker was quoting.

A second person came to me in recent days. Their premium had jumped to an alarming level over a year ago, almost to €1,800. Companies are now finding ways to do this. The Competition and Consumer Protection Commission is examining cartels in the motor insurance industry. A person made a claim over two years ago and it had relatively little impact on his premium in the past two years. Suddenly, this year the quote from his existing company, through the broker, was by far the cheapest of the quotes received. The only company with which he could be insured was his existing company, but it was jacking up the rate. However, it was jacking it up at a lower rate than other companies. Why was that? We need to look under the bonnet to find out what is going on. This issue is extremely urgent. Whatever is required, whether it be legislation or other measures, we need to fast-track it to force motor insurance companies to provide a publicy available database that will be under the control of the Central Bank.It can be on a no names basis, but they must give a number and the reason for the quote. How can an insurance company justify the premium of an individual who had an unblemished record all his life until a car accident over two years ago going up in the normal way following the accident but suddenly in the third year going sky high? The question that has to be asked is why he cannot get motor insurance from any company bar his existing company which is charging an exorbitant rate. The only way we will address that is to prevent all insurance companies from issuing a motor insurance policy until they release the details of every single motor insurance policy they issue. If that was done, it would bring some level of reason. My worry is that when they cannot blame it, they are going to go after the soft targets. Motor insurance is the only obligatory insurance.

The empirical evidence shows that insurance companies are not getting with the programme in terms of providing transparency and reasonably affordable motor insurance policy premiums.