Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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204. To ask the Minister for Finance the steps he is taking to ease the rising costs of motor insurance; when he last met officials on this matter; the persons he has met; and if he will make a statement on the matter. [55022/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy should note at the outset that in my role as Minister for Finance I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on the risks they are willing to accept.

However, it is acknowledged that pricing in the motor insurance sector has been subject to a lot of volatility in recent years, from a point where some premiums appeared to be priced at an unsustainably low level to the more recent experience, particularly during 2015/2016, of large increases.

Indeed, the problem of rising motor insurance premiums was the main impetus for the establishment of the Cost of Insurance Working Group in July 2016. Its Report on the Cost of Motor Insurance was published in January 2017 ().  The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are set out in an Action Plan. 

Work has been ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress.  The third such update was published on the Department's website on 23 October 2017 and shows the progress to date on the overall implementation of the recommendations.

32 actions were due for completion in the first three quarters of the year in total and 29 of those actions have been completed to date.  Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. The fourth quarterly update is scheduled to be published within the next few weeks and will focus on the 14 actions which were due for completion in the final quarter of 2017.

It should be noted that the most recent CSO data (for November 2017) indicates that private motor insurance premiums have decreased by 16.3% since peaking in July 2016.  While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases.  However, I am hopeful that this greater stability in pricing will be maintained and that premiums should continue to fall from the very high levels of mid-2016.

The Cost of Insurance Working Group is now chaired by Mr. Michael D’Arcy T.D., the Minister of State for Financial Services and Insurance.  The Working Group met in full session on a total of 15 occasions during 2017, most recently on 6 December, and will continue to meet regularly throughout 2018.  In parallel with the ongoing implementation of the recommendations from the Report on the Cost of Motor Insurance, the Working Group has also been undertaking an examination of the employer liability and public liability insurance sectors. 

As part of its preparation of the Motor Report, the Working Group consulted with a wide range of relevant stakeholders (see Appendix 4 of Report for list).  In addition, in his role as Minister of State  for Financial Services and Insurance, Minister D’Arcy has met on a regular basis with insurance companies and a wide range of bodies associated with the insurance sector generally, while my officials – particularly those within the Insurance Policy section – maintain good day-to-day working relationships with relevant stakeholders including, for example, Insurance Ireland.

In response to the “details supplied” section of the Deputy’s question, the Deputy should be aware that policy in respect of the NCT lies with the Minister for Transport, Tourism and Sport.  The NCT was introduced to comply with an EU Roadworthiness Testing Directive aimed at improving road safety and environmental protection. While the NCT is one component of having safer vehicles on our roads, every vehicle owner has a personal and legal responsibility to ensure that their vehicles are roadworthy and well maintained.  The NCT is an inspection or general “health check” of what is visible and accessible on the day of the test and includes a check of the roadworthiness of such safety features as, amongst others, lighting, brakes and tyres.

The NCT is a minimum requirement of roadworthiness and is therefore not the only rating factor taken into account in the provision of motor insurance.  Insurers will generally require that a vehicle has a valid NCT in order to be covered.  However, in making their individual decisions on whether to offer cover and what terms to apply, they will also use a combination of other rating factors, including the age of the vehicle, as well as the vehicle type, the age of the driver, the claims record and driving experience, the number of drivers, how the vehicle is used, etc.  My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market.  In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to the age of a vehicle and the availability/price of cover, different insurance companies will use different age thresholds.