Seán Haughey (Dublin Bay North, Fianna Fail)
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155. To ask the Minister for Finance the way that he will ensure that the benefits of the insurance reform agenda are passed on to customers; and if he will make a statement on the matter. [46304/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will appreciate, 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. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive).

Nevertheless, this Government understands that insurance costs are a significant issue for customers, and has therefore prioritised reform of this sector through the whole-of-Government Action Plan for Insurance Reform.Delivery of the reform package is overseen by the Cabinet Committee Sub-Group on Insurance Reform, which is chaired by An Tánaiste, and contains a number of Ministers as standing members. Work is underway to complete the delivery of the remaining actions, with some 80 per cent of delivered at the time of the last implementation report in March.

It is the Government’s expectation that all savings from this reform agenda are passed onto customers, including any reduction in claims costs resulting from the new Personal Injuries Guidelines. The Guidelines represent a milestone in the insurance reform agenda, and have significantly lowered award levels for many common injuries, with recent data from the Personal Injuries Assessment Board indicating that the overall average award has fallen by 42 per cent compared to awards made in 2020 under the Book of Quantum.

The Guidelines are therefore expected to lead to a reduction in the overall cost of claims, including legal fees. It is necessary for the insurance industry to pass on any benefits from this initiative, and the many other reform already introduced, to its hard-pressed customers, especially in the context of current inflationary pressures.

Both Minister Donohoe and I have been clear on these points and remain committed to holding the insurance sector to account, in so far as it is permissible, on commitments made. In this regard, I will be meeting with the CEOs of the eight main insurers in the Irish market again in the coming weeks in order to further assess their response to the Action Plan reforms, and to stress the importance of reflecting lower claims costs through reduced premiums. I will also continue to press insurers on the need to expand their risk appetite, especially into ‘pinch-point’ sectors that are experiencing issues with availability and affordability of cover.

In addition, the National Claims Information Database (NCID), managed by the Central Bank of Ireland, contains official data on premiums and claims costs, and provides further evidence on the Irish insurance market.

Over time, this allows policymakers and stakeholders to assess the cumulative impact of this multi-action reform package. Following the implementation of the Personal Injuries Guidelines, the Central Bank has amended the NCID data specification and will collect further claim settlement data. The fourth NCID Private Motor Report, which will provide data up to the end of 2021, should show some initial insight into the impact of the Guidelines, and I look forward to the publication of this report in the coming weeks.