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For Oral Answer on : 21/05/2024
Question Number(s): 94 Question Reference(s): 22729/24
Department: Finance
Asked by: David Stanton T.D.
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QUESTION
* To ask the Minister for Finance to report on any recent interaction by his Department with the insurance industry; and if he will make a statement on the matter.
– David Stanton T.D.
REPLY
Insurance reform remains a key priority for this Government and is being delivered via the Action Plan for Insurance Reform. As per the most recent Action Plan Implementation Report, published in February 2024, the vast bulk of the actions it contains are now either delivered or initiated. The importance that Government places on this issue is evidenced by the fact that implementation is overseen by a Cabinet Committee Sub-Group on Insurance Reform, chaired by the Tánaiste. Nevertheless, Government is aware that certain groups can face difficulty in terms of affordability and availability of certain insurance lines. Accordingly, we continue to prioritise the delivery of the Action Plan, which will bring benefits to individuals, businesses and households alike.
Since assuming my current role a few weeks ago, I have been in the process of meeting with the main insurers in the Irish market to set out the Government’s expectation that savings arising from this whole-of-Government reform agenda will be reflected via reduced premiums, as well as increased availability of cover. Major international insurers have indicated that they are impressed with the pace and scale of our reforms to date and point to Ireland as a positive example of Government action in this sector. Indeed, we have recently seen a number of new entrants to the market with further positive indications in this space.
This is a vote of confidence in the Government’s reforms, the wider insurance market here and for consumers and businesses.
Last year, one of the key “asks” of both the insurance industry and reform campaigners was put in place – the rebalancing of the Duty of Care. The amendments to the Occupiers’ Liability Act 1995 will deliver major benefits to businesses, sporting groups and community and voluntary organisations in particular. This legislation should help to reduce frivolous claims proceeding to litigation. In time, cost savings from reduced claims should also help to lower premiums for businesses, particularly those engaged in activity-based / heavy-footfall areas, where claims associated with ‘slips, trips and falls’ are more prevalent.
Other key reforms include the introduction of the Personal Injuries Guidelines, with data from the Injuries Resolution Board (formally the Personal Injuries Assessment Board (PIAB)) indicating that the overall average award has fallen by 35 per cent compared to awards made in 2020 under the Book of Quantum. Another key, complementary action is the Personal Injuries Resolution Board Act 2022, which aims to increase the number of personal injury claims settled through the Injuries Resolution Board, thereby reducing the expense and time associated with personal injuries litigation. Further actions aimed at lowering costs include measures to reduce fraud, and legislation placing perjury on a statutory footing for the first time.
In my own engagement with industry, including its representative body Insurance Ireland, I have also impressed upon them the importance of insurers increasing their risk appetite, especially to provide cover for small and niche sectors that may be experiencing issues with affordability and availability.
The Office to Promote Competition in the Insurance Market, which I chair, is in regular contact with areas that are experiencing insurance issues. It has become clear that the market is responding positively to the Government reform agenda, with insurance now available in previously difficult areas such as; equestrian activities: inflatable hire; ice-skating; sport clubs; play centres; and SMEs. The Office continues to assist in the connection of various groups experiencing insurance difficulties to relevant stakeholders, and will also maintain its engagement with IDA Ireland to help leverage the ongoing insurance reforms with the objective of targeting new entrants to the Irish market.
In conclusion, I wish to assure the Deputy of the Government’s intention to ensure that the ongoing implementation of the Action Plan for Insurance Reform will continue to secure the availability and affordability of this key financial service.
