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Business Insurance: Motion [Private Members] (Continued)

Wednesday, 13 March 2019

Dáil Éireann Debate
Vol. 980 No. 8

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(Speaker Continuing)

[Deputy Thomas P. Broughan: Information on Thomas P. Broughan Zoom on Thomas P. Broughan] I also commend Sinn Féin on its amendment which asks insurance companies to reduce premiums in conjunction with the reforms being introduced.

  The Minister of State was speaking about this matter yesterday and it is almost like Groundhog Day in this Dáil when it comes to insurance. On 21 March last year, almost exactly a year ago, we debated a Fianna Fáil motion and Sinn Féin amendment which called for the implementation of the 15 action points in the report of the cost of insurance working group on employer and public liability insurance. That would have obliged insurers to provide a breakdown of the premium cost to the business, give us more information and ensure that the book of quantum of the Personal Injuries Assessment Board, PIAB, would, at long last, be updated at least once every three years. We are going around in circles with this Government.

  Last year's motion also called for the deadline for the feasibility study on including employer liability and public liability data on the national claims information database to be brought forward from the fourth quarter of 2019. Perhaps the Minister of State will address that specific point and provide an update, although perhaps he did already because I missed his introductory speech.

  We should work towards creating a single European market. We have just had a discussion with the European Commission in the Committee on Budgetary Oversight on the European semester. It has often been asked by all sides of the House why, when we get some of the downsides of European membership, we do not get more of the upsides. Deputy Michael McGrath has consistently highlighted issues around interest rates and mortgage rates but there are also issues relating to insurance.

  We called, exactly a year ago, for the Department of Finance and the CSO to report on the creation of a price index for employer and public liability insurance premiums and my colleagues spoke very eloquently about that earlier. Why has another year gone by and insurance costs keep escalating? There are issues to do with databases, books of quantum, fraud and so on. Why has the Government not addressed them? It is a particular hallmark of this Government that Ministers - for example, Deputies Eoghan Murphy and Bruton - announce grandiose plans for climate change, housing, education and so on, but there is no action or delivery of the first necessary action. It would be better to take one or two of the measures the motion calls for and actually progress them.

  The Government should be working with Fianna Fáil to bring forward real action on this. The whole House is ad idem that we need to address these problems in the insurance industry and particularly how they impact our constituents.

  Towards the end of 2016, there were reports that insurance fraudsters from the UK were coming to Ireland to cheat the system because they get much higher payouts than in the UK. Colleagues have rightly referred to this. There was a particular case in that era when the book of quantum payment in Ireland for a broken femur was over 300% higher than the UK award. In the book of quantum, the awards for minor whiplash injuries can be anything from €16,000 to €20,000; for moderate injuries, the figure is €20,000 to €30,000; for moderately severe, the figure is €30,000 to €52,000; and severe and permanent whiplash injuries command awards of between €44,000 and €78,000. It is quite clear that the book of quantum has to be addressed and that is something many Deputies have been saying for years.

  There is very little appetite in the legal profession to introduce and implement the reforms needed. It could be said that some close friends of the legal profession in Seanad Éireann are holding up much-needed reform of the judicial appointments system. The legal costs associated with claims is a particular problem. We need urgent reform in this area.

  The profitability of insurance companies is very high. At the beginning of March this year, it was reported that the main insurance companies in the country made more than €200 million in profit. Chambers Ireland, which regularly briefs us about business matters, published a cost of insurance survey in August-September 2017 which showed that 43% of respondents had an increase of between 5% and 20% in their premiums, some reported increases of 50% to 100% and others said they had increases of more than 100%. These are the actual bills that a business owner is faced with from his or her accountant or auditor, year on year, and it is a significant deterrent to having an efficient and progressive business. The brokers justified those increases at the time, according to Chambers Ireland, by referring to market conditions and an overall increase in claims but there is a dearth of information. The information gap in this sector upsets people most of all. There are some valuable data available from the CSO and PIAB which deduced that, between January 2011 and July 2016, insurance costs generally rose by 57% and that approximately 42% of non-motor PIAB applications relate to employer liability and public liability insurance, with increases of 15% and 20%, respectively, at a time when Ireland was in a severe recession.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher I am sorry to interrupt Deputy Broughan but his group had agreed to give Deputy Fitzmaurice two minutes.

Deputy Thomas P. Broughan: Information on Thomas P. Broughan Zoom on Thomas P. Broughan That is grand. I was not aware of that but I am delighted. I will just say that I warmly support the motion and amendment.

Deputy Michael Fitzmaurice: Information on Michael Fitzmaurice Zoom on Michael Fitzmaurice I support the motion. We can kick Ministers all we want but we need to acknowledge that the Minister of State, Deputy D'Arcy, has brought in a few Bills to try to resolve the situation. Some Bills are being held up at the moment but the Minister of State should try to gazump the Judicial Appointments Commission Bill which will be held up for a while because of the person who is trying to bring it in.

The problem all around the country, as everyone knows, is that payouts are on one side of the equation and businesses and everyone else with insurance are on the other side. The amounts of money thrown to people are astronomical at times. People with genuine complaints have to be looked after but some of the payouts are ferocious.

On the other side are cases where someone tries to slip on a floor or whatever and the claims are crippling. In fairness to all politicians in the House, no one is against trying to make changes in the insurance sector. The Minister of State will be supported in any Bill he brings in. The quicker we do this and sort out the book of quantum and provide realistic targets and not these astronomical awards the better.

The Minister of State can correct me if I am wrong but I think there is a Bill that deals with the amount of profits insurance companies are making, even though they are crying about the weather, or whatever. If one looks at the profit that three or four of the insurance companies have made this year, it is clear that they need to be hauled in.

There is a bit of payback in all this and the insurance companies have to do their bit. We have to do it through legislation. The number of claims has to be reduced.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher I received a text from Deputy Boyd Barrett who was caught in traffic. With the agreement of the House, he will speak now.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett I was caught up in committee.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher Does Deputy Boyd Barrett agree?

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett I do.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher Of course he does. Deputy Boyd Barrett has nine minutes but he does not have to take all nine.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath Deputy Boyd Barrett will try to take ten.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett I thank Fianna Fáil for the motion. I agree with the overall thrust of it and the various measures proposed to try to deal with high insurance costs. Costs have tailed off a bit for motorists but are still significantly impacting home insurance, business insurance, public liability insurance and so on where insurance premium increases have been very dramatic and punitive for some customers.

Following on from the last speaker, the elephant in the room in all this is the profit taking of the insurance companies themselves. There should be more emphasis on that in the Fianna Fáil motion, much as I welcome many of the measures proposed relating to the book of quantum, the PIAB, addressing insurance fraud and so on.

The evidence of the significant increase in profits for some of the biggest insurers shows that even if reforms are brought in to address these areas, the insurance companies do not pass it on in the form of lower premiums.

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