Debate contribution: Insurance Costs: Reductions for Workers, Families and Businesses

Debate contribution by Mr Eóin Tennyson on 14 May 2024.

MLA

Mr Eóin Tennyson

Party at the time

Alliance Party

Date

14 May 2024

Type

Debate contribution

Business

Private Members' Business

Heading

Insurance Costs: Reductions for Workers, Families and Businesses

Assembly identifier

Official Report component 4490388

Read the official Assembly record

Text

As other Members have said, whilst this is primarily a reserved matter, I welcome the opportunity to debate this important topic, which has been a leading contributor to the rising cost of living. All of us in the Chamber will have been contacted by constituents about rising costs, with some facing car insurance renewals that are 50% higher than they were just a year ago. The Association of British Insurers (ABI) estimates that car insurance increased by 34% between the end of 2022 and the end of 2023. In attempting to justify that increase, the ABI points to a 31% increase in vehicle repair costs and a 35% increase in the cost of providing temporary vehicles. If you scratch below the surface of those figures, however, you will find that the total of UK insurance payouts increased by just 18%. That data, combined with the fact that insurance premiums in the UK are significantly higher than in many of our European neighbours, begs the question as to whether customers being taken for a ride — the pun is intended on that one, Madam Principal Deputy Speaker. Nevertheless, those sharp increases are not being felt equally. Sales data examined by 'Which' suggests that as of last September, drivers who pay for insurance monthly are forking out, on average, £300 more than those who pay in a lump sum. Those who spread payments are disproportionately younger and less-wealthy people, leading the head of insurance at the Financial Conduct Authority to describe insurers' interest rates as "a tax on being poor." In order to maximise transparency, insurers' interest rates should be compared in a published league table, with the regulator taking strong action against those who do not provide fair value in line with their statutory obligations. Younger drivers fare worse in price increases. On average, 18-year-olds now pay £3,145 for their car insurance, which is a staggering £1,300, or 70%, more in the past 12 months. I am deeply conscious that those costs have a hugely prohibitive and regressive impact on employment and social opportunities, particularly in rural areas such as parts of my constituency where public transport links are lacking in choice and frequency and late-night services are non-existent. To be clear, I am an advocate of modal shift, but, if we are to change behaviours, we should do so through progressive and fair taxation and reinvestment in public transport and active travel alternatives, not by relying on rip-off insurance premiums. The insurance industry states that young drivers are more likely to be involved in crashes. In fairness, that view is supported by data. In 2021, 8,753 under-25 drivers were involved in an accident in Northern Ireland, which means that they were involved in 18% of all car accidents that year. It remains the fact, however, that, as Diane Forsythe said, the majority of young people drive responsibly and, as ever, are suffering as a consequence of the actions of a minority in our community. This is where the Executive have a role: in education, in supporting better and safer driving and in improving road safety. A graduated driving licence scheme is one option that, I hope, the Minister for Infrastructure will consider in due course. We also know that our planning system and flood alleviation measures play an important role in the home insurance premiums that our constituents pay. I will turn to insurance premium tax. In recent years, under the Conservative Government, there has been a pattern of pursuing tax cuts for the wealthiest in society whilst hiking taxes that are paid by working families. Since the Conservatives formed the Government in 2010, insurance premium tax has increased from 5% to 12%. That adds £67 to the average policy and, again, is regressive in that the cost is highest to younger drivers and those who already fork out the most on car insurance and other insurance. An argument can be made that a targeted reduction for those facing the highest costs would be a progressive intervention. I support the motion. The Financial Conduct Authority should do more and should consider a full market inquiry into the insurance industry. I also agree that the UK Government need to take a more proactive approach to upholding the FCA's responsibility for proper scrutiny.

711 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 10:27 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification