Written answers

Tuesday, 27 July 2021

Department of Finance

Insurance Industry

Photo of Martin BrowneMartin Browne (Tipperary, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

303. To ask the Minister for Finance if his attention has been drawn to the fact that a tourism business (details supplied) has been forced to close due to being unable to get insurance which will lead to the loss of up to 20 jobs and removes an important tourist attraction from north County Tipperary; and if he will make a statement on the matter. [39281/21]

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

I am conscious of the difficulties that the absence or withdrawal of insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has prioritised insurance reform. While neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, I can assure the Deputy that this Government is committed to improving the cost and availability of insurance for all consumers, businesses and community groups. This includes the important leisure and hospitality sectors.

In this regard, the Action Plan for Insurance Reformsets out 66 actions which aim to bring down costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden that insurance costs can have on business, community and voluntary organisations. As you may be aware, the Government recently published the first Action Plan Implementation Report, which shows that work is progressing well to implement these important reforms, with 34 of the 66 actions now completed.

Among these key achievements has been the implementation of new Personal Injuries Guidelines, which have significantly lowered award levels for many categories of common injuries, particularly those of soft tissue. As awards have been reduced, we now expect that insurance premiums should also be reduced. This is a logical consequence and it is also the commitment that the industry has made. Minister Fleming will meet with CEOs of the major insurance providers again later this year to review their ongoing response to this and other key reforms.

Another key achievement of the reform agenda is the new Office to Promote Competition in the Insurance Market. Since its establishment, the Office has held meetings with wide range of stakeholders including insurance companies, representative bodies, civil society groups and state regulators on the issues surrounding competition. Minister Fleming will report on a regular basis to the Cabinet Sub-Group on its progress.

The Department is also working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials from both are developing a customised proposal for potential market entrants and are targets to engage intensively with. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market such as the one you have highlighted.

The Deputy may also be aware that the Central Bank recently published the first National Claims Information Database report on employers' liability (EL), public liability (PL) and commercial property insurance. It showed that many businesses in Ireland are accessing affordable insurance, but some industries are finding it very difficult. This is a rich source of data which will further enhance the transparency of the sector. My officials are also engaging with the Central Bank to consider what enhancements could be made to further improve transparency through the next iteration of this report, so that the impact of the Guidelines can be seen in the EL, PL and commercial property market.

I would like to add that we are already seeing indications that the insurance industry is beginning to respond positively to our reform agenda.

Finally, it may interest the Deputy to know that Insurance Ireland, the representative body for insurance providers in this country, operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu.

Photo of Martin BrowneMartin Browne (Tipperary, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

304. To ask the Minister for Finance his views on the high cost of insurance that is being asked of operators in the forestry industry. [39321/21]

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

I am very conscious of the difficulties facing some sectors, including those such as the forestry sector, with regard to the affordability and availability of insurance cover. It should be noted at the outset that neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis.

The Government has nevertheless prioritised the reform of the insurance sector in order to improve the cost and availability of this key financial service, including for businesses. The Action Plan for Insurance Reformsets out 66 actions in this regard across several policy areas, including my Department, with 95% due to be completed by the end of 2021. At its most recent meeting in June, the Cabinet Sub-Group on Insurance Reform, which oversees the implementation of the Action Plan, reflected upon the considerable progress made in the first half of this year. Subsequently, the first Action Plan Implementation Report was published earlier this month which shows that 34 out of the 66 actions now completed. One of the key achievements has been the adoption of new personal injuries guidelines, which have significantly reduced awards for a range of injuries and I now expect that premiums will decline as a consequence. It is something that both I and Minister of State Fleming have stressed the necessity of in our engagements with the insurance industry over recent months.

Another significant achievement has been the creation of the new Office to Promote Competition in the Insurance Marketwithin the Department of Finance. The role of the Office is twofold: to assist in reducing insurance costs, and increasing the availability of cover, by promoting competition in the Irish insurance market. The Office has held a number of meetings with key stakeholders to discuss important matters regarding reducing cost, consumer empowerment and increasing the provision of relevant information. Minister Fleming, who chairs the Office, will report on a regular basis to the Cabinet Sub-Group on its progress.

The Department is also working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials from both are developing a customised proposition for potential market entrants and are identifying a specific targets to engage intensively with. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market.

I would like to add that we are already seeing some indications that the insurance industry is beginning to respond positively to our reform agenda.

In conclusion, seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. In this regard, it is my firm belief that ongoing work across Government to deliver the remaining elements of the Action Plan, including measures to reform the Personal Injuries Assessment Board (PIAB), reduce fraud, and make changes to the duty of care, will help more companies to expand their product lines or enter into the Irish market. This, in turn, will lower the insurance costs for customers across all markets, including those in the forestry sector.

Comments

No comments

Log in or join to post a public comment.