Government launches new Action Plan on Insurance Reform to tackle costs
- Foilsithe:
- An t-eolas is déanaí: 24 Iúil 2025
- the Action Plan contains 26 actions across Departments of Finance, Justice, and Enterprise, with 10 priority actions, as these will have the biggest impact on insurance affordability, transparency and availability
- delivering transparency on premium pricing for consumers and businesses is noted as key action
- Action Plan officially launched by Minister of State for Financial Services, Credit Unions, and Insurance, Robert Troy, and Minister for Enterprise, Tourism, and Employment, Peter Burke
Government has today (24 July) unveiled its new Action Plan on Insurance Reform with a range of priorities aimed at lowering insurance premiums. This Action Plan covers the remainder of 2025 to 2029 and will build on the progress of the 2020 Action Plan.
The Action Plan is focused on 6 key themes, each with a range of specific actions to deliver better outcomes for consumers and businesses. These themes are:
- transparency and affordability
- competitiveness and availability
- fraud
- innovation and skills
- climate protection gap
- legal reform
As part of the development of this Action Plan, the Department of Finance held a public consultation process which received over 70 submissions from private businesses, political parties, representative bodies, and members of the public. The content of these submissions directly contributed to the actions being put forward by Government today.
Among the 26 actions, 10 have been considered as priority. These priority actions include a keen focus on transparency in the sector, particularly in terms of pricing. As part of this priority action, the Department of Finance will begin work immediately with the sector to introduce a Transparency Code.
Other priority actions include strengthening the powers and remit of the Injuries Resolution Board, a feasibility study on a cap for certain categories of personal injuries awards, enhancing the Office to Promote Competition in the Insurance Market, streamlining the authorisation process for new market entrants, and exploring tougher penalties on insurance fraud and measures to reduce the number of uninsured drivers.
Tackling the reliance on litigation when it comes to insurance, particularly for motor insurance claims, is an important element of the proposed Injuries Resolution Board’s reforms. According to the latest data from the NCID on settled private motor claims, it is 22 times more expensive for a claimant to take a claim through litigation rather than through the Injuries Resolution Board as well as taking over twice as long. The timeframe for settled claims through litigation is significantly longer that those settled through the Injuries Resolution Board, with the level of awards not being materially higher.
These actions follow the positive impact of the first Action on Insurance Reform including rebalancing of the Duty of Care, reform of the Injuries Resolution Board, introduction of the Personal Injuries Guidelines, enhancement of the National Claims Information Database, and the market entry of three new players (OUTsurance, Revolut, and Fastnet).
The implementation of the Action Plan on Insurance Reform will be led by Minister of State Troy through the Department of Finance and monitored by the Cabinet Sub-Group on Insurance Reform, which is chaired by the Tánaiste.
Reflecting the importance of reducing insurance costs for consumers and businesses, work has already begun on a number of the priority actions with progress expected before the end of the year.
Prior to publication of the Action Plan, the Cabinet Sub-Group on Insurance Reform agreed to not seek approval from the Dáil and Seanad on an increase in personal injuries awards, as recommended by the Judicial Council. This decision, along with the reforms proposed in the Action Plan, underline the priority being placed on reducing costs by this government.
Tánaiste, Minister for Foreign Affairs and Trade, and Minister for Defence, Simon Harris, said:
"In a rapidly changing global environment, we must place an unrelenting focus on enhancing our competitiveness and controlling the controllables. This means ensuring the cost of doing business is not prohibitive for our SMEs.
"It is vital that Ireland does what it can to support businesses to thrive. This new Action Plan builds on the strong insurance reforms to-date which have led to improvements in transparency and have seen personal injury awards reduce.
"By Government working together, we can deliver tangible progress in this next phase of insurance reform so that the benefits are felt by both businesses and consumers. As chair of the Cabinet Committee Sub-Group on Insurance Reform we will meet on a regular basis to drive this Action Plan forward."
Minister of State for Financial Services, Credit Unions, and Insurance, Robert Troy, said:
“Despite progress on insurance costs in recent years as a result of the government’s previous Action Plan on Insurance Reform, an inflationary global climate has led to some costs creeping up again. That is why this government is acting, with the publication of our Action Plan today.
"It is vital that consumers are seeing greater transparency from the insurance sector, particularly in regard to how their premium is communicated to them. A well-functioning insurance market is central to a well-functioning economy, and this plan is about levelling the playing field for consumers and businesses and allowing insurance companies to operate a fair profit margin so they can continue to innovate and grow.”
Minister for Enterprise, Tourism and Employment, Peter Burke said:
“I welcome today’s publication of the new Action Plan for Insurance Reform, in particular its focus on enhancing competitiveness and the availability and affordability of all types of insurance, including business insurance. I am also pleased to see further legal reform and the strengthening of the role of the Injuries Resolution Board as priority actions. The Injuries Resolution Board remains the fastest, most cost-effective means of claims resolution and it is essential that their role in bringing clarity and consistency to the personal injuries landscape is maintained and enhanced."
Minister for Finance Paschal Donohoe said:
“The Programme for Government commits to delivering further action to drive down insurance costs impacting households, motorists and businesses. One of the first steps to delivering this commitment is the new Action Plan for Insurance Reform. The Action Plan is a clear demonstration of this government’s focus on the continued reform of this sector to ensure fairer pricing, enhanced competition and transparency, and a more sustainable insurance market for all. The cost and supply of insurance remains a priority for this government and the onus is now on the insurance industry to fully engage with the measures outlined in the new Action Plan, in the interest of transparency and fairness for all consumers."
Notes
Between 2016 and 2024 Ireland’s motor insurance index declined by around 40%, in contrast to increases in the Eurozone and UK during the same period.
The split between damage and personal injury within overall claims costs has adjusted. Personal injury share has dropped from 72% to 44%. This highlights the impact of the insurance reform agenda on reducing personal injury claims since the adoption of the Guidelines in April 2021.
However, motor damage has risen from 28% to 56% reflecting inflationary pressures and the increased costs in fixing damages.
Comprehensive cover now accounts for over 90% of motor policies, and with a rise in repair costs, more consumers are now less inclined to protect their no claims bonus and more likely to claim on their insurance. This impacts overall premiums.
For private motor claims in H1 2024, litigated cases under €100,000 legal costs are now 22 times higher than those paid under the Injuries Resolution Board [€18,859 vs €836]. Compensation for this approach is just over 1% higher yet takes almost 2 times longer [5 years vs 2.8 years].