Credit Unions

Part of Northern Ireland Assembly – in the Northern Ireland Assembly at 4:45 pm on 6 February 2012.

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Photo of Simon Hamilton Simon Hamilton DUP 4:45, 6 February 2012

Just bear with me a second. They point to the cost of compensation in the legal process, but my understanding is that most cases do not get to court anyway. There is an argument that we should look at taking cases to lower courts. However, the cost that that might burden claimants with means that it may not always be in their best interests. As we criticise the legal process, in some ways we should be grateful that there is an absence of a no-win no-fee culture in Northern Ireland. It is not part of the law here, and thank goodness for that.

In its evidence, the ABI put forward the cost of the legal process here. That is why I think that, at least and as the amended motion would require, we should examine the process. We should examine the issue with some of the others, including those that Mr Poots raised. One of those is uninsured drivers, which may be one for both the Department of the Environment and the Department of Justice to deal with. We are something like the fifth or sixth worst region in the UK for uninsured drivers, and that adds an estimated £30 to every premium.

Another issue that came out in the evidence sessions was claims handling and the associated referral fees. Although an insurance premium may include the cost of a courtesy car, there is an additional cost for the referral fee. That all adds up. There are costs built into the system that should not be there and that are often covered by the initial insurance premium. It is estimated that that adds £2 billion to the cost of insurance every year in England and Wales. That is a stark figure. Ms Ritchie secured an adjournment debate in the House of Commons on car insurance in Northern Ireland, and, in response to her, Mark Hoban said that the insurance industry in the United Kingdom lost £1·8 billion last year. Therefore, that is £2 billion of additional and, in many cases, unnecessary costs and £1·8 billion of a loss. Those are not insignificant figures.

The insurance industry tells us that we have a competitive market in Northern Ireland, but that is entirely different from having a market that is as competitive as it should be. The abject absence of a significant number of insurance companies in Northern Ireland undoubtedly has an impact on the cost of premiums. Before I came into the Chamber, I ran a quote through for myself on one of those cost comparison websites, and I found that there were more companies that did not want to insure me than did. Perhaps they realised who I was and did not want me anywhere near them, but those who did not are significant names in the financial services market, including banks such as Santander, organisations such as the Co-operative and insurance companies such as Swinton Insurance. Those companies do not do any business in Northern Ireland.