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INSURANCE IRELAND DINNER SPEECH BY THE MINISTER FOR TRANSPORT, TOURISM & SPORT Tuesday 29" September 2015 The Economy and investment in transport infrastructure Distinguished guests, ladies and gentlemen, Thank you for inviting me here today to address this dinner of Insurance treland. Four and a half year’s ago the current Government inherited a situation which included a Troika bailout, an economy in freefall, banks on the brink of collapse, soaring unemployment, significant investment at an end in transport and other infrastructure, and Ireland's international reputation in shreds. Since taking office the Government's focus has been on national recovery, The new government adopted a clear plan to stabilise the economy and turn the country in the right direction, We have seen a turnaround over the last four and a half year’s. The recovery is growing, employment is rising, confidence has returned, Government borrowing has been greatly reduced, and interest rates on our debt are at all- time lows, but there is still a long way to go to fully repair our public finances. Our plan targets steady investment and growth which will help eliminate the remaining Government deficit and bring Government debt down to below average European levels, The Government's Capital Plan published today includes an allocation of €10 billion for my Department, over the next seven years, which will allow for appropriate levels of investment to be made in public transport to maintain and improve the existing road and public transport network Six billion euro is being made available to support the development of our road network, with provision also being made for a strategic rail line to serve the transport needs of North Dublin, which is one of the fastest growing areas in the country. Funding will also be allocated for the DART. Expansion project, with an allocation being made for the redesign of the DART Underground, which remains a key element of integrated transport for the Greater Dublin Area. * The allocation of €10 billion for my Department outlines the priority that the Government places on transport and delivering a well-functioning transport system that facilitates a growing economy. By planning now for the years ahead we will ensure that the services we deliver can adequately meet our needs so that continued future economic growth is supported. Contribution of the Insurance sector to the economy © The Insurance industry has an important role to play in enabling the achievement of national objectives, and the recovery in the economy in Ireland creates opportunities for growth in the insurance sector in ireland. In that regard | am delighted to see announcements such as that of Blue Insurance's announcement in July of 100 new jobs in Blanchardstown focussed on expansion into overseas markets. Difficulties in getting Motor Insurance From a road safety perspective, it is vital that all drivers be insured so that all legitimate victims of road traffic incidences can be adequately compensated * Whatever the reasons behind the much reported decision of some insurance Companies over the summer months not to provide motor insurance for cars over a certain age, it can certainly not be in the public interest to encourage drivers out of the market or to give any incentive to people to drive while uninsured. ¢ 1am concerned that the introduction of such policies, and the manner in which they are publicised, are counterproduotive as well as generating poor publicity for the motor insurance industry. In the minds of many consumers such policies appear to be illogical (particularly in cases where the car has recently passed an NCT test), discriminatory and arbitrary * These policies jar somewhat with the Road Traffic Act requirements that a basic level of motor insurance is in place, and places an unfair burden on law abiding citizens who maintain their cars in good condition notwithstanding that they are older. | would like to ask insurers to reconsider these practices and to ensure that every prospective customer receives a fair quotation for insurance. Cost of motor insurance There has also been a lot of interest in the last year in the rising cost of motor insurance. | am aware of your arguments regarding the increase in motor insurance costs, and will be as supportive as my position allows engaging in any matters under my remit. You will be aware that many of the issues you've raised regarding the cost of motor insurance fall into the area of responsibility of other Departments These include the Department of Jobs and Enterprise regarding reforms Concerning the Injuries Board, Department of Justice & Equality regarding legal costs, measures to prevent fraud, and compensation levels in the courts, and Department of Finance and the Central Bank regarding prudential supervision of insurance companies and the cross-border provision of insurance. There are areas in which insurers can help reduce costs also and policyholders. For example the setting up of a properly functioning motor insurance database, as has been done by the insurance industry in the UK, to assist An Garda Siochana in the enforcement of the legal requirement to have basic motor insurance cover being in place. Some €60 million is paid out by the insurance industry, and indeed by policyholders, for uninsured driving resulting in accidents each year . | believe that the modest cost of the insurance industry establishing a properly — functioning motor insurance data base, combined with increased enforcement by An Garda Siochana, following its establishment , would have a big impact on the incidence of uninsured driving in Ireland, as has already happened in the UK. | believe this could make a significant contribution to reducing costs and premiums in the motor insurance sector. ‘Setanta Insurance and the MIBI The liquidation of Setanta Insurance last year and the subsequent High Court case also has potential to have a big impact on the motor insurance sector. | am aware that the MIBI and Insurance Ireland members are looking at the implications of the High Court decision and are considering the implications arising from the judgement and their response. Preparation for compensation payments from the Insurance Compensation Fund were at an advanced stage prior to the taking of the recent High Court action. Department of Finance had publicly committed to reviewing what led to the collapse, and to look again at the Insurance Compensation Fund framework that is in place to assist policyholders and claimants. Payments from the ICF are currently subject to the limit of 65% of the amount due or €825,000, whichever is the lesser unlike the equivalent Fund in the UK which is not similarly limited. There is no doubt that the ICF limits on payments taken together with the fact that MIBI payments are not subject to a percentage of claim limit, made the MIBI more attractive to litigants as a payor for Setanta claims, particularly in the light of the information that the liquidator provided to the Oireachtas Committee earlier this year that he might only be able to pay out in the region of 80% of Setanta claims Putting the ultimate outcome of the Setanta case to one side, my Department has initiated an engagement with the Department of Finance on the matter of the correct framework for any future insolvencies in the motor insurance sector. Road Safety The implementation of the current and previous road safety strategies and strengthening of the road safety legislation has resulted in a dramatic reduction in road traffic fatalities over the last number of years. Itis indeed good to note the reduction in fatalities this year to date over the same period in 2014. However, the last two years ~ 2013 and 2014 — did not follow the downward trend of previous years. The lesson here is that we cannot afford to became complacent in our efforts to reduce fatalities and serious injuries on our roads. A Cabinet sub Committee, chaired by me, meets twice per year to review the implementation of the Road Safety Strategy in some detail. My officials liaise with the Road Safety Authority and An Garda Sfochana and other stakeholders, including the insurance industry on the implementation of the Road Safety Strategy and on the enforcement of road traffic legislation Our aim is to reduce road fatalities further. | am confident that the implementation of the Road Safety Strategy together with enhancements to Road Safety legislation that we are continuously working on will contribute to. the reduction of costs for motor insurance providers and should enable reductions in motor insurance premiums over time. My Department is currently working towards the introduction of roadside drug detections in co-operation with An Garda Siochna, We have recently introduced penalty points for using a motor vehicle without a valid NCT. More speed detection zones are being introduced. All of these changes have one single purpose ~ to reduce road deaths and serious injuries regardless of how popular or unpopular they are. am extremely grateful for having been given this opportunity to talk to you. | look forward to a productive relationship in the future.