Michael Lowry (Tipperary, Independent)
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248. To ask the Minister for Finance what measures are being considered to ensure that the introduction of mandatory insurance does not lead to overcharging due to a lack of competition among insurance providers, potentially contravening EU competition law; the measures he is taking to address this matter; and if he will make a statement on the matter. [44063/24]

Jack Chambers (Dublin West, Fianna Fail)
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This Government remains strongly committed to achieving a competitive and sustainable insurance market where insurance is affordable and available to all. The implementation of the Action Plan for Insurance Reform is progressing well, with vast bulk of actions now complete, and all ten principal actions finalised.

Insurance reform is a priority for the Government, overseen by the Cabinet Committee Sub-Group on Insurance Reform. The approach involves targeted action across Government departments to enhance the domestic operating environment for insurers. However, under EU legislation (Solvency II Directive), the Government cannot compel insurers in terms of coverage or pricing, as underwriting decisions are based on insurers’ assessments of risk.

Motor insurance is the one insurance product that is mandatory, in that every person intending to use a vehicle on a public road must have third-party cover at a minimum. Therefore, it is important that motor insurance is affordable. In that regard, I note that motor insurance rates have decreased by around 40 percent since their peak in July 2016. This has been accompanied by new capacity entering the market such as OUTsurance, Revolut and Fastnet, enhancing competition and benefitting approximately 2.2 million policyholders.

This illustrates the effectiveness of Ireland's insurance reform policies as our reforms, in particular targeting personal injury claim costs, have clearly mitigated against the steep rise in insurance costs seen in other markets. From my understanding, the latest National Claims Insurance Database (NCID) report highlighted an increase in motor damage claims costs. It is important to note, these are largely influenced by a range of external factors including global inflation, and supply chain issues, along with labour market tightness. Despite the higher damage costs, comprehensive motor insurance coverage reached 93 percent in 2023. The increase in comprehensive insurance is positive from a consumer point of view as the quality of motor insurance cover is now at its highest rate under the NCID data.

The aforementioned Government's Action Plan for Insurance Reform has included significant achievements since 2020, most notably amending the Occupier’s Liability Act 1995, reforming the Injuries Resolution Board and introducing the new Personal Injury Guidelines which have reduced average award levels significantly. Additionally, the establishment of the Insurance Fraud Coordination Office and the introduction of the Criminal Justice (Perjury and Related Offences) Act 2021 are pivotal steps in combating insurance fraud and ensuring a fairer claims environment.

To conclude, it is crucial for the insurance industry to support these reforms by challenging frivolous claims, adhering to new award guidelines, and promoting the Injuries Resolution Board. While the inherently cyclical nature of insurance markets and international pressures have a significant impact, Ireland’s domestic reforms aim to make it a more competitive destination for international insurance capital, including in mandatory segments.