Dáil Éireann Debate, Thursday - 18 December 2025
377. Deputy Pa Daly asked the Tánaiste and Minister for Finance the measures to address profits in the motor insurance industry; and to decrease the cost of premiums; and if he will make a statement on the matter. [73657/25]
Amharc ar fhreagraAs the Deputy will be aware, neither I as Tánaiste and Minister for Finance nor the Central Bank of Ireland can intervene directly in the pricing or provision of insurance products. These are commercial decisions for insurers, taken in line with EU law, specifically the Solvency II Directive, which governs the operation of the Single Market for insurance.
Ireland’s reform programme has helped shield consumers from sharper premium increases experienced elsewhere. Between 2016 and 2024, motor insurance premiums increased by approximately 65 per cent in the UK and by around 20 per cent across the Eurozone. In contrast, Ireland experienced a proportional reduction of approximately 34 per cent over the same period. This reflects the impact of measures such as the Personal Injuries Guidelines, reforms to the duty of care, and legislative enhancements to the Injuries Resolution Board, all of which have reduced claims costs and improved consistency and predictability.
Nonetheless, I fully acknowledge concerns regarding motor insurance profitability and the ongoing cost of premiums for consumers. Transparency and reform remain central to the Government’s response. A key achievement in this area has been the establishment of the National Claims Information Database (NCID), operated by the Central Bank of Ireland. The NCID has significantly enhanced oversight of claims costs, income and profitability trends within the insurance market and is regarded internationally as a leading source of insurance data.
NCID data shows that the private motor insurance market, after experiencing sustained losses from 2011 onwards, returned to profitability in 2023. In 2024, the sector recorded a profit of approximately 4 per cent, compared with 8 per cent in 2023. This reduction reflects the once-off impact of capital reserve releases in earlier years, rather than a structural increase in insurer returns. When viewed over a longer timeframe, profitability in the motor insurance market has remained cyclical in nature, underscoring the importance of assessing trends across multiple years rather than focusing on individual annual results.
Having said that it is also very important that the sector ensures good value for money and treats its customers in a fair and transparent manner. The affordability, transparency and availability of insurance will continue to be prioritised by Government through the new Action Plan for Insurance Reform, published in July 2025. As part of the Action Plan, a transparency code for the insurance industry is under development. The Code will require insurers to provide simple, understandable explanations of how premiums are formed and what broader factors influence pricing.
Government remains firmly committed to achieving a fairer, more sustainable and competitive insurance market, ensuring that the benefits of these reforms are fully realised, delivering tangible improvements in cost, choice, and access for all consumers.
