Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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327. To ask the Minister for Finance his plans to implement reforms in view of the increasing cost of car insurance premiums; and if he will make a statement on the matter. [35281/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I can assure the Deputy that insurance reform is a key policy priority for this Government. There are a number of areas that require reform and this is why making progress on these will require a ‘whole-of-Government’ approach. This is recognised in the ‘Programme for Government – Our Shared Future’document, which lays out commitments that are aimed at addressing consumer and business concerns on the cost of insurance. These include increasing transparency; reviewing duty of care legislation; looking at how to further enhance the role of the Personal Injuries Assessment Board; minimising the scope for questionable claims; and increasing market competition. Implementation of this agenda has commenced and will be a key issue for Minister Donohoe and myself, as well other members of Cabinet, especially those that will be working on this issue through the recently established Cabinet Committee on Economic Recovery and Investment’s Sub-Group on Insurance Reform.

In my view, two key reforms are required to address the affordability and accessibility of insurance. The first of these is to bring the levels of personal injury damages awarded in this country more in line with other jurisdictions. In this regard the establishment of the Judicial Council last December is very important. It is due to adopt new personal injuries guidelines to replace the Book of Quantum by 31 July 2021. It is also desirable that these guidelines could play a role in the lowering and consistent application of court award levels. Insurance Ireland, the representative body for insurance providers in this country, has indicated that if award levels come down so will premiums charged by its members. I believe that this is a very important statement and is a commitment this Government intends holding the insurance industry to.

The second reform is to encourage the greater acceptance by claimants of awards made by the Personal Injuries Assessment Board (PIAB). Last week’s National Claims Information Database (NCID) report confirmed that the PIAB settlement amounts are almost identical to those settled through litigation. A key difference however is the PIAB channel facilitates more time-efficient claim settlement with considerably lower legal costs. This was always the aim of the PIAB, and its establishment in 2003 led to much lower insurance costs for motorists. I believe that there is a definite interest in getting more claimants to settle at the PIAB stage – both for the claimants themselves, but also consumers generally as increased costs for insurance companies are reflected in insurance premiums. As noted, this is an issue which the Insurance Reform Sub-Group is prioritising and it will consider proposals on enhancing the role of the PIAB.

With regard to the Deputy’s statement that ‘the cost of car insurance premiums is increasing’, I would draw his attention to data from last week’s second NCID Private Motor Insurance Reportfrom the Central Bank. This shows that, after peaking in Q2 2018, the earned premium for private motor insurance decreased by 9 per cent up to the end of 2019. I would reasonably expect that the next year’s report will show further reductions in the average earned premiums for private motor insurance into 2020. Separately, the Central Statistics Office (CSO) in its recent September Consumer Price Index (CPI) private motor insurance component shows that private motor insurance premiums have reduced by about 30 per cent from their July 2016 peak. While for methodological reasons, these datasets are not directly comparable, both have indicated the same downward trend for some time.

Finally, while I accept that motor insurance may not be decreasing for every individual, I believe it is important to acknowledge that the reforms already introduced by the Cost of Insurance Working Group have had a considerable impact in stabilising the cost of motor insurance and indeed many people should be seeing decreases in the cost of their motor insurance premiums. The Government intends to build on this success and also focus efforts on increasing both the affordability and availability of insurance for businesses, particularly affecting those SMEs in high-footfall sectors such as hospitality and tourism.