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'Greedy insurance industry' has spun a false narrative to maximise profits, Dáil hears

Sinn Féin’s Pearse Doherty has said the insurance crisis is not a priority around the Cabinet table.

Image: Shutterstock/tommaso79

Updated Dec 17th 2019, 7:49 PM

THE GOVERNMENT HAS been accused of having a “hands-off policy” on insurance for years, by Fianna Fáil leader Micheál Martin.

A Central Bank report yesterday revealed that motor insurance in Ireland has risen by 42% in the last decade despite a 2.5% reduction in the average cost of individual claims over the same period.

Details contained in the Central Bank’s first Private Motor Insurance Report of the National Claims Information Database (NCID) also shows that between 2009 and 2018, the overall frequency of claims by motorists fell by 40%.

That figure included a 20% reduction in the number of injury claims and a 43% reduction in the number of damage claims.

The NCID was established following a recommendation by the Government’s Cost of Insurance Working Group (CIWG).

“Was the Government’s response due to ignorance or gross incompetence? Did the Government know what was going on in recent years and the degree to which people, in particular young people, were being ripped off while the Government failed to protect them from this industry and to take the measures and the decisive intervention that would have made a difference?” Martin asked the Taoiseach today during Leaders’ Questions. 

He said the Taoiseach has failed to protect people from “a greedy industry that has spun a false narrative to maximise profits”.

Martin also questioned comments made by the Taoiseach last week in which he said motor insurance costs had fallen in recent years.

“What I said is that motor insurance has gone down by about 25% since it peaked in 2016, which it has.  That is what the figures show.  It went up and has gone down by approximately 25% since 2016,” he said, stating that his source of information is the Central Statistics Office (CSO).

Martin said the source is “essentially the CSO, which is asking the industry to present the figures”.

He said the Central Bank report is a definitive study.  

“It is not what the Government has been doing, namely, coming in here last week stating complacently that it is all sorted and that costs are going down by 20% to 30%.  The cost went up 62% in five years. What in the name of God was the Taoiseach doing?  What were his Ministers doing?” he said.

Meanwhile, Sinn Féin’s Pearse Doherty said a ministerial task force is needed.

Insurance crisis

Doherty has called on the Taoiseach to immediately set up and lead a task force with key ministers to deal with the impending insurance crisis.

The task force would immediately engage with the insurance industry and affected sectors, and be able take real action to save businesses and childcare providers that face closure unless action is taken.

He said the government, including Minister of State Michael D’Arcy, have claimed that the average motor insurance costs had fallen from their peak.

“The facts tell a different story,” Doherty wrote in a column for TheJournal.ie this morning. 

Ironshore Europe, one of the biggest insurers in the childcare sector, withdrew from the Irish market recently, he pointed out.

However, according to a response to a parliamentary question asked by Doherty, the Minister for Finance Paschal Donohoe confirmed that he had not met with either the Minister for Children and Youth Affairs or any childcare providers in 2019 despite the impending crisis.

Doherty said the task force should include the Minister for Finance, Minister for Business, Enterprise & Innovation and Ministers representing the most affected sectors, including the Minister for Children & Youth Affairs.

Childcare

“Ironshore Europe were one of two leading insurance providers in the sector. They are now set to withdraw from several Irish markets after being bought over by Hamilton Insurance of Liberty Mutual.

“With the policies of thousands of childcare providers due to expire in January, this will mean one of two things.

“Either these childcare providers will be unable to get alternative cover and close, or the lack of competition will increase their premiums still further, leading to higher childcare costs for parents,” he said.

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He said the government has failed to take the failure of the insurance market, and its impact on businesses, seriously.

“The minister responsible for the insurance sector doesn’t even sit at the Cabinet table,” he added. 

D’Arcy has denied he has been “asleep at the wheel” when it comes to the current insurance crisis.

Last week, at the Fine Gael parliamentary party meeting, the junior minister gave a presentation on insurance costs to his colleagues. A number of TDs raised concerns about the costs not coming down. 

The Taoiseach is understood to have repeated his previous statement, that if the Judicial Council, which has only recently been established, have an impact on costs, he may legislate to do so.

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