Seanad debates

Wednesday, 13 February 2019

Nithe i dtosach suíonna - Commencement Matters

Insurance Costs

10:30 am

Photo of Robbie GallagherRobbie Gallagher (Fianna Fail) | Oireachtas source

The Minister of State, Deputy Stanton, is very welcome to the House, and I thank him for taking time out to come. The reason I have him here concerns insurance costs. Unfortunately, this is still a serious issue for a great many people. I know some work has been done about it but clearly more needs to be done. As I am sure the Minister of State will be aware, insurance costs bring serious financial pressures to bear on people, be it the cost of insuring one's motor vehicle or costs incurred by those who are in business, such as public liability or employers' liability, or indeed charitable organisations, community groups, football clubs or whatever else. Unfortunately, all are negatively affected by the ever-increasing, spiralling cost of insurance premiums.

Looking first at the motor insurance industry, I note that between 2015 and 2017 premiums shot up by over 70%. I acknowledge that things have got a little better in this regard, but clearly more needs to be done for anyone trying to insure a motor vehicles. One of the reasons we could point to as to why these premiums are so high is that the payouts for personal injuries here are sky-high compared with those of other countries. I think our payouts are on average almost 4.5 times higher than equivalent claim payouts in the UK. Unfortunately, I read recently that we now have a reputation as being the whiplash capital of Europe. Whiplash accounts for almost 80% of all motor insurance claims here, compared with France, for example, where the figure is just 3%. The average whiplash award in Ireland is €15,000. This is five times the awards in Italy and Spain and three times the awards in the UK. Clearly this is an area that needs to be tackled in order that motor premiums are reduced.

The other issue concerns business and the ever-rising costs of premiums, be it public liability or employers' liability. I spoke this morning with a small business owner in County Monaghan who has 12 employees. He told me that his employers' liability and public liability premiums in 2017 amounted to €9,800. As of last year, this has now increased to €11,600. Nothing has really changed in the interim, there have been no claims, and his broker advised him this week that the premiums will more than likely increase again. This puts added pressure on businesses that are getting it tight at present, and clearly more needs to be done.

I read recently in one of the national newspapers that a business owner who runs a play centre for children, which is quite common throughout the country, has seen the premium go from €2,500 up to €16,000 over the past five years. Clearly, this is crippling and has a serious impact on the viability of the business and, by extension, the jobs that depend on it. No doubt the Minister of State will mention the fact that a group was set up to look at this entire area and it has done some work on this and made many recommendations as to what it feels should happen. Unfortunately, it is my understanding that very few of those recommendations have been acted upon to date, which is disappointing.

One of the recommendations was an anti-fraud unit. There is nothing more frustrating for people than to see people setting out purposefully with a fraudulent claim, the result of which will be that people will pay more for their insurance premiums. We need a dedicated insurance fraud unit headed by the Garda to investigate people involved in such activities.

Yes, some work has been done, but clearly a lot more needs to be done. I would like to see Government tackle this issue with more vigour and more enthusiasm because we have a serious problem here with the ever-increasing costs of premiums. When one adds Brexit to the mix, the issue clearly needs to be tackled with more urgency.

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