Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

81. To ask the Minister for Finance the reason motor insurance costs are still rising; and if his attention has been drawn to the fact that this is making it almost impossible for young drivers to get cover when starting out on their own. [44242/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I nor the Central Bank of Ireland 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 an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.  Consequently, it is not possible to direct insurance companies as to the pricing levels or terms or conditions that they should apply in respect of particular categories of drivers.

However, in relation to the Deputy’s main contention that insurance costs are still rising, I disagree. In this regard, it should be noted that the most recent CSO data (for September 2018) indicates that private motor insurance premiums have decreased by 21.5% since peaking in July 2016.  I appreciate that these figures represent a broad average; however, we have to recognise that these are the same figures that showed the large increase that many commentators regularly reference.  Therefore, I am satisfied that the overall trend currently is downward, which is welcome.

The above said, I am aware that some policyholders, like younger drivers, may not be seeing reductions in their insurance premiums, and may indeed have difficulty obtaining cover at a reasonable price.  Unfortunately, younger drivers have historically tended to face higher premiums as they are seen by insurers as a category which poses a higher risk.  In making their individual decisions on whether to offer cover and what terms to apply, insurers will also use a combination of rating factors, which include the age and type of the vehicle, as well as the age of the driver, the relevant claims record and driving experience, the number of drivers, how the car 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 the driver, and the relevant experience they may have, different insurance companies will price the risk differently.

In conclusion, I am hopeful that with the continuing implementation of the recommendations of the Cost of Insurance Working Group there will be a further positive impact on pricing over the next 12 months or so.