Pearse Doherty (Donegal, Sinn Fein)
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74. To ask the Minister for Finance the steps he is taking to ensure insurance companies pass on the benefit of lower claims to customers rather than increase profit margins; and if he will make a statement on the matter. [16304/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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At the outset, it is important to clarify that neither I nor the Central Bank of Ireland can interfere with the provision or pricing of insurance products, as these are commercial decisions made by individual companies, governed by the EU Single Market framework for insurance (the Solvency II Directive). However I want to assure the Deputy that the Government is committed in the new Programme for Government-Securing Ireland’s Future to further action to drive down insurance costs impacting households, motorists and businesses and to ensuring that insurance companies pass on the benefits of the reform agenda to customers in the form of reduced premiums.

The most recent data from the National Claims Information Database (NCID) shows that employer/public liability and motor insurance have returned to profitability after a number of years of losses. Across the period 2009 to 2023, the industry recorded a profit (as a percentage of total income) of 2.1 percent. In 2023, the market had an operating profit of 13 percent of total income. For private motor insurance, NCID data over the period 2009-2023 shows a 5 percent profit (as a percentage of total income) and the operating profit for 2023 was 8 percent of total income.

The cost of insurance is a multi-faceted issue and premiums are sensitive to global inflationary pressures. For example, employer/public liability insurance is impacted by factors such as construction inflation, business turnover, visitor numbers while the cost of labour and the increasing use of advanced vehicle technology has driven up the cost of vehicle repairs. Consequently, prices vary across the market.

The previous Action Plan on Insurance Reform, published in 2020, delivered significant achievements, most notably the rebalancing of the Duty of Care, reforming the Injuries Resolution Board and the introduction of new Personal Injury Guidelines. In addition, in part due to the more attractive operating environment here, new competitors such as OUTsurance, Revolut and Fastnet have entered the motor insurance market, enhancing competition and capacity. In addition, a number of existing insurers expanded their risk appetite to new areas, including hospitality, SMEs, sports and leisure activities. This represents a vote of confidence in the reforms enacted and the wider insurance market in Ireland. Maintaining a competitive insurance market is essential to ensuring ongoing access to affordable coverage for businesses, community groups, and consumers alike.

Despite these reforms, it is regrettable that insurers have been slow to pass on savings to customers. Minister of State Troy has met with Insurance Ireland and major insurers to stress the Government's expectation that these cost savings must be reflected in lower premiums and broader coverage availability. A key focus of the new Action Plan on Insurance Reform will be prioritising further competition in the market and working with stakeholders, including insurers, to enhance transparency and promote affordability across all types of insurance.

To further enhance transparency and accountability, the Government is prioritising faster data releases from the National Claims Information Database (NCID). The Central Bank is expected to publish a report with H1 2024 data by mid-year, providing insights into premium trends and market developments. This increased transparency is essential to ensuring fair pricing for customers and supporting ongoing policy development.

In conclusion, the Government remains fully committed to monitoring the sector, deepening and widening the supply of insurance and ensuring that the benefits of insurance reforms are fully passed on to consumers, businesses, and community and voluntary groups across Ireland.