Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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228. To ask the Minister for Finance if he will report on his efforts to improve the provision of affordable motor insurance; his views on whether the levels of profit in the sector needs to be focused on; and if he will make a statement on the matter. [10072/17]

Michael Noonan (Limerick City, Fine Gael)
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The Working Group on the Cost of Motor Insurance, chaired by Minister of State, Deputy Eoghan Murphy, completed its Report in December 2016.  The Report was approved by the Government on 10 January 2017 and subsequently published.  It sets out a detailed set of 33 recommendations and 71 actions to tackle those factors that are influencing the increasing cost of motor insurance by introducing a comprehensive suite of reforms for the insurance  sector some of which can be actioned immediately or are already underway and others which will require a longer period of time to put in place.  Implementation of the Action Plan has already commenced. 

In relation to the issue of profitability,  the Deputy should note that this issue is discussed in Chapter 3 of the Report.  It highlights that the industry made substantial profits between 2005 and 2008 (€2.2bn of which €1bn approx. related to motor insurance). However during the period from 2009 to 2015, there were underwriting losses of €1.3bn, with motor insurance accounting for €900m of this.  It should also be noted that the low interest rate environment has materially affected the levels of interest or investment income which insurers can earn and has reduced their ability to compensate in part for their underwriting losses.

The issue of profitability therefore has been problematic for the industry in the last few years and this has been a contributory factor to the price increases over the last 18 months.

My primary focus at this stage is ensuring that the Cost of Motor Insurance Report is fully implemented as I believe this will lead to greater stability in the pricing of motor insurance and will help prevent the volatility that we have seen in the market in the past (both up and down).  It should also better facilitate  new entrants into the market which in turn should provide consumers with a greater choice of companies to choose from.