Richard Bruton (Dublin North Central, Fine Gael)
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Question 130: To ask the Minister for Finance his plans to tackle increases in insurance costs; the person or agency that has responsibility for their implementation; the timeframe for their implementation; and if he will make a statement on the matter. [45388/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am considering how best to implement the commitment contained in the National Recovery Plan 2011-2014 to identify further ways to tackle increases in insurance costs. I am aware of the increased pressure on insurance premiums in recent times particularly in the household insurance area. Much of this is due to the unprecedented level of claims which the insurance industry suffered in the winter of 2009/2010. The insurance industry estimated that, between the November 2009 flooding and the big freeze at the start of 2010, they have paid out about 550 million euro worth of claims. The industry has put the level of claims in further context by indicating that the insured cost of these two weather events exceeded the total cost of all serious weather events that have occurred in the last decade. This cost was estimated at 358 million euro. A further increase in the number of claims is expected because of the recent inclement weather.

Even in advance of the weather-related claims, market analysts had identified and reported on a number of important market developments that were expected to lead to upward pressure on premiums. For example, the 2009 Standard & Poors report on the non-life insurance market warned that the next few years were likely to mark a testing time for Irish non-life insurers. In particular, the report highlighted that underwriting profitability would become much more important due, for example, to the volatility of global stock markets amongst other factors. The report noted the importance of price discipline to ensure the long-term economics of the insurance marketplace.

Finally, the Deputy might wish to note that neither the Central Bank nor I, in my role as Minister for Finance, can prohibit or restrict an insurance company from increasing its annual premium rates. This is a commercial decision for the company in question based on an assessment of the risks involved.