Bernard Durkan (Kildare North, Fine Gael)
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Question 105: To ask the Minister for Finance if he has ascertained the precise level of increase in insurance premiums, including motor insurance, over the past 12 months; the reason for such increases; and if he will make a statement on the matter. [45220/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 106: To ask the Minister for Finance the steps he has taken or proposes to take to bring insurance costs down in line with economic trends; and if he will make a statement on the matter. [45221/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 107: To ask the Minister for Finance the extent to which he has monitored insurance premium increases; if the basis for such increases has been clarified, particularly against a background of alleged deflation in the economy; and if he will make a statement on the matter. [45222/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 105 to 107, inclusive, together.

The response deals with recent increases to insurance premiums, the background to such increases, and the Government response. While I am aware that there has been an increase in insurance premiums including motor insurance premiums this year, the Financial Regulator does not maintain statistics on insurance premium costs, so I am not in a position to comment upon the level of such increases.

However, the Financial Regulator has provided some background as to why insurance prices have increased in these deflationary times. It has advised me that while the non-life insurance market performed well up to the end of 2006, market sources indicate that much non-life business was written at a loss in 2007. This trend continued in 2008, but the companies were still willing to write business at a loss in order to maintain their market share. They were able to do this as a result of the reserves they had built up during profitable years. However, the situation could not go on indefinitely and indications are that firms are now taking action on pricing to underpin their financial positions, including in the motor insurance area.

This position is supported by a report published earlier this year by Standard & Poor's titled 'A Testing 2009 for the Irish Non-Life Insurance Market, Despite Fundamental Strengths'. It provides an insight into the problems facing the industry at the moment. The report envisages a difficult year for the non-life industry as a result of rising claims and continuing intense competition which they say is limiting price increases. They add that this combined with anticipated lower investment returns is expected to hinder profitability.

In the current difficult trading climate, there is a delicate balance to be struck between ensuring the long-term sustainability of the non-life insurance industry and at the same time making sure that the consumer obtains good value for money. I am particularly conscious of the impact of a significant increase in premiums for both the consumer and business and I have informed the industry that it must be a priority for them to ensure that insurance cover is provided as competitively as possible consistent with long term commercial sustainability and viability. Finally as the Deputy will be aware, there is a commitment in the Revised Programme for Government to review insurance costs. My Department is currently considering appropriate steps to commence the study.