Joe Flaherty (Longford-Westmeath, Fianna Fail)
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43. To ask the Minister for Finance the action being taken to reduce the cost of motor insurance premiums. [9310/22]

Dara Calleary (Mayo, Fianna Fail)
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48. To ask the Minister for Finance the amount by which motor insurance premiums have fallen since the current Government entered office in June 2020. [9679/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 43 and 48 together.

The Government recognises that the cost of insurance is a significant issue for many groups, including motorists, and is therefore continuing to prioritise this issue through the work of the Cabinet Committee Sub-Group on Insurance Reform. In this regard, the Sub-Group is pursuing 66 cross-departmental actions, as set out in the Action Plan for Insurance Reform, including a number of key measures that should help to improve costs for motorists.

Chief among these was the delivery, last year, of new Personal Injuries Guidelines to replace the Book of Quantum, which should provide greater certainty regarding award levels. The Guidelines have significantly reduced awards for many common injuries, and should also help to lower legal fees by encouraging greater use of the Personal Injuries Assessment Board (PIAB) in settling claims. As a result, consistent implementation of the Guidelines should reduce the cost of claims, in turn leading to lower premiums.

Another key development with respect to motor insurance is the proposal by the Central Bank, following its extensive review of differential pricing, to ban the practice of “price walking” in the motor and home insurance markets for personal consumers from July this year. This is a very significant move, as it would end the “loyalty penalty”, whereby motorists and other consumers are charged higher premiums, relative to the expected cost, the longer they remain with an insurance provider.

According to the latest CSO Consumer Price Index data for January 2022, the price of motor insurance is now 11% lower than in June 2020, when this Government was formed, and has fallen by about 10% since the Insurance Reform Sub-Group was established in September 2020. This reflects a downward trend seen in recent years, with motor insurance prices having decreased by 38% from their peak level in mid-2016. At a time of other inflationary pressures in the economy, I believe this significant decline in prices indicates that past reforms by the Cost of Insurance Working Group, as well as the more recent achievements under the Action Plan, are contributing to positive developments in motor premiums.

Minister Fleming and I, along with officials, will continue to work with colleagues to complete the outstanding reforms under the Action Plan, with a view to improving the affordability of insurance for all groups. For example, the Department of Enterprise, Trade and Employment has recently published legislative proposals to enhance the role of the PIAB, which should bolster the advantages accruing from the Personal Injuries Guidelines, and further help to reduce the overall cost of claims. Both Minister of State Fleming and I remain committed to holding the industry to account so as to ensure that the benefits of this series of reform measures are reflected in the price of insurance, including for motorists.