Robert Troy (Longford-Westmeath, Fianna Fail)
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44. To ask the Minister for Finance the actions being considered by his Department to reduce the cost of motor insurance for drivers; and when he expects to bring forward further proposals which will have an immediate impact on prices. [11141/18]

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 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.  That Report made 33 recommendations with 71 associated actions to be carried out in agreed timeframes, as set out in the Action Plan. 

These recommendations were formulated to address the issue of increasing motor insurance costs, whilst taking account of the need to ensure a financially stable insurance sector.  This stability aspect is important, as we do not want to find ourselves in a situation again where particular firms drive prices down to a level that is unsustainable and which ultimately results in insolvency.

Work is 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 fourth such update was published on the Department’s website on 20 February 2018 and shows that of the 46 separate deadlines set during 2017 within the Action Plan, 39 have been met.  Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. 

I believe that the ongoing implementation of the Report on the Cost of Motor Insurance, in parallel with the implementation of the Working Group's Report on the Cost of Employer and Public Liability Insurance – which was published in January 2018 – will make a difference to the pricing of insurance premiums over the next 12 or so months.  It is envisaged that the implementation of all the recommendations cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, will achieve the objective of delivering fairer premiums for consumers.  I also believe that the Setanta judgment, by finding that MIBI is not liable to meet third party claims, removes a major uncertainty from industry, which I would expect to be reflected in pricing in the short to medium term.

Finally, it should be noted that the most recent CSO data (for January 2018) indicates that private motor insurance premiums have decreased by 17% 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.