Michael Cahill (Kerry, Fianna Fail)
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36. To ask the Minister for Finance if there are plans to inhibit insurance companies in raising car insurance premiums, when compensation claims are reducing, in view of the fact that drivers are obliged to pay insurance; and if he will make a statement on the matter. [27453/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Under Section 56 of the Road Traffic Act 1961, motor insurance is required to drive a mechanically propelled vehicle in a public place. This legislation is under the remit of the Minister for Transport. As the Deputy is aware, neither the Minister for Finance nor the Central Bank of Ireland can intervene in insurance pricing or provision under the EU's Solvency II directive.

According to Central Statistics Office data, in the year to April 2025, motor insurance prices in Ireland increased by 9.7 per cent on average. This recent rise is after a long period of sustained price reductions, and it is important to stress that prices remain 34.4 per cent lower than their peak in July 2016.

One of the key goals of the previous Action Plan for Insurance Reform was to reduce insurance costs for consumers by tackling the high cost of claims. While average personal injury awards have declined, insurance premiums have not fallen on a one-to-one basis. This is because premiums are influenced by multiple factors, including risk exposure, legal expenses and claims trends. The balance of motor insurance claims has shifted significantly in recent years. Where personal injury claims previously represented 70 percent of total claims and motor damage 30 percent, the split has now rebalanced to 50:50.

While insurance reforms have successfully reduced personal injury claims, this development highlights the growing cost of vehicle damage claims. The last few years has also seen the emergence of inflationary pressures in motor insurance. This rise is driven by a combination of external factors, including increased vehicle technology, supply chain disruptions and a tightening labour market, which have raised the cost of repairs.

The reforms of the insurance sector implemented by Government have been successful in attracting new entrants to the Irish market. For instance, OUTsurance, a new major home and motor insurer, launched last year which is a positive development for consumer choice and competition.

The Government remains fully committed to the continued reform of the insurance sector, ensuring it results in lower costs and greater availability of insurance for all customers across Ireland. To further this progress, a new Action Plan for Insurance Reform is being developed with a focus on encouraging further competition in the market and working with stakeholders to enhance transparency and affordability across all types of insurance, including motor insurance.

In conclusion, while insurers make underwriting decisions on a case-by-case basis and take into consideration a variety of sources and factors, Government is of the view that insurers need to step-up, increase their risk appetites and reduce prices, and to work with their customers to ensure that the benefits of the reforms can be fully realised.