Pearse Doherty (Donegal, Sinn Fein)
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194. To ask the Minister for Finance if measures are considered to ensure that reductions in claim costs are passed onto consumers in the form of lower premiums resulting from the adopted personal injuries guidelines; and if he will make a statement on the matter. [26131/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Firstly, it is important to note that neither I, nor the Central Bank, have the power to direct insurers to sell any specific product, or to make it available at a particular price. This is reinforced by the EU Solvency II directive which expressly prohibits Government from doing so.

As the Deputy is aware, the Personal Injuries Guidelines came into force in April 2021 and materially reduced award levels for many categories of common injuries. Latest data from PIAB indicates that on average award levels are 42 per cent lower than under the previous Book of Quantum. Furthermore, 72 per cent of awards are now under €15,000, while 49 per cent are under €10,000. Consequently, a number of common injuries will move to the jurisdiction of the District rather than the Circuit Court, thus reducing associated legal fees. The Guidelines also provide guidance in relation to injuries previously not included in the Book of Quantum and will be used by both the PIAB and the judiciary.

They should therefore help to bring more certainty to the process, and as such reinforce the benefits of using PIAB, which should further reduce the costs of claims. Notwithstanding this, I understand there are a number of legal cases ongoing at the moment which are impacting on the finalisation of awards. Minister Fleming has met the CEOs of the main insurance firms on a number of occasions to discuss the Government’s expectation that insurers will reflect the decrease in award levels through reduced premiums, as part of the Government’s commitment to ensure that savings of the insurance reform agenda are passed onto customers.

Another key development with regard to insurance costs has been the Central Bank’s decision to prohibit price-walking from 1 July 2022. This is a form of dual pricing whereby customers are charged higher premiums relative to the expected costs the longer they remain with an insurance provider. This ban is a balanced approach that will protect customers who prefer to stay with their current provider from being subject to a ‘loyalty penalty’, while still allowing customers to benefit from discounts from new providers.

Other actions which aim to assist in lowering costs include measures to reduce fraud, enacting legislation making perjury easier to prosecute, as well as efforts by the Office to Promote Competition in the Insurance Market to attract new providers. Work is also continuing across Government to drive forward the outstanding aspects of the Action Plan for Insurance Reform, including: further changes intended to reduce costs such as strengthening PIAB; and reforming the duty of care. It is my belief that the overall implementation of the Action Plan should help to improve both the cost and availability of insurance. Recent data from the Central Statistics Office shows that average private motor insurance prices have fallen by 41 per cent since their peak in July 2016, and it is my hope that these ongoing reforms will bolster this downward trend in the wider insurance market, to the benefit of consumers, businesses and community groups.