Peadar Tóibín (Meath West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Finance the efforts he has undertaken to reduce service costs such as insurance on business. [3242/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Pricing of insurance is generally determined by an assessment an insurer will make of the risks involved. Generally I understand that previous claims experience will have a major influence on such matters. Therefore, if there has been a major increase in claims in a particular area, then this will be reflected in an increase in premiums. Competition in the market place acts as a constraint in such circumstances, however insurance companies have always to be conscious of their prudential obligations and are required by the Central Bank of Ireland to meet their capital requirements on an ongoing basis in order to ensure the sustainability of their business. In these circumstances when they are exposed to a high level of claims, it is inevitable that their capital position will suffer and put pressure on prices.

It is worth noting that past initiatives, in particular the establishment of the Personal Injuries Assessment Board and legislation to improve road safety which has reduced accidents significantly still continue to make a major contribution to keeping insurance costs at a reasonable level.

Finally, it should be noted that the ability of the Government to influence the competitiveness of insurance costs is limited as neither I as Minister for neither Finance nor the Central Bank can prohibit or restrict an insurance company from increasing its annual premium rates, as this is a commercial decision for the company in question.