Insurers must broaden their risk appetite and pass on savings generated by Government reforms of the sector to consumers, the Minister responsible for financial services said.
Seán Fleming, Minister of State for Financial Services, sits on the Cabinet committee subgroup on insurance reform — with reform of the sector and decreasing prices for consumers set as a priority for the Government when it was formed in 2020.
On Wednesday morning, Mr Fleming unveiled a report by PwC and Insurance Ireland on the market. He told the industry that reforms it has sought have been delivered, with the “vast bulk” of the action plan for insurance reform now implemented.
“These reforms have been sought by industry and the Government has delivered,” he told the group. “It is not important the savings and benefits generated from these reforms are passed on to the public.”
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His speech outlined that initial data from the Personal Injuries Assessment Board (PIAB) indicates award levels have declined by an average of 40 per cent since personal injuries guidelines came into effect in April last year. Motor insurance prices are down by 10 per cent in the year to September, he said. Home insurance is rising, however, driven by global supply chain issues.
Some 92 per cent of businesses in Ireland pay premiums that are less than €5,000 per year, Mr Fleming told the group, but he said some niche areas and business sectors still struggle with costs or the availability of cover — which is accentuated by Brexit.
It is “incumbent on industry to broaden its risk appetite” when it comes to group schemes set up to cover such underserved sectors, he told the conference. The IDA is seeking overseas companies to come into the Irish market and provide services, he said.
Upcoming reforms include rebalancing the duty of care in the Occupiers Liability Act and an enhanced role for PIAB, with legislation to enable these actions set to come through the Oireachtas shortly, Mr Fleming said.
“I am pleased that the finish line is in sight and would like to reiterate the Government’s expectations that cost savings made by insurers as a result of these reforms are passed on to consumers,” he told the group. The Minister added this is “particularly true” arising from PIAB reform that means “we can reasonably expect that legal costs — which are a significant driver in claims costs — should be reduced under the new regime”.
