As Deputy Kirk is aware, the relatively high cost of insurance for young drivers is directly related to their adverse claims experience as a risk category. The 1996 Deloitte and Touche Report, "On an Economic Evaluation of Insurance Costs", found that the average cost of an insurance claim for 17 to 24 year old drivers is twice that of the 36 to 40 age group and that motorists in the 17 to 24 age group are responsible for over three and a half times the total average claims costs incurred for motorists in the 36 to 40 age group.
After being appointed to my present position, I immediately re-established and revamped the Motor Insurance Advisory Board. This was a major initiative on my part aimed at providing us with information and advice on trends in motor insurance costs and with policy recommendations to address those costs. The board, the expanded membership of which includes a member representing young drivers' interests, has undertaken an ambitious programme of work and research, particularly in relation to the basis of charges for young drivers.
The primary focus of initiatives aimed at reducing the cost of motor insurance for young drivers must be on reducing the frequency of accidents and the associated cost of claims. The key, therefore, to reducing insurance costs for young drivers is to create appropriate conditions for improving their standards of driving and their appreciation of road safety.
A number of initiatives are in place and are being taken to improve driving standards and safety awareness among all drivers, including young drivers. The Irish Insurance Federation, in conjunction with the driving instructors register, has introduced a scheme of insurance premium discounts for the young driver on completion of a required number of driving lessons. The National Safety Council, in co-operation with the Garda Síochána, continues to promote anti-speeding and anti-drink driving media campaigns, including road safety education programmes for sec ondary school students. My Government colleague, the Minister for the Environment and Local Government, Deputy Dempsey, has been asked to look at a graduated licensing system for learner drivers based on the Ontario model, which could have a significant impact if introduced here. I recognise that there are other possible approaches and I agree that the suggestion made by Deputy Kirk is very interesting.
I am constantly in communication with the insurance industry about a number of issues, including that of young drivers. I have had numerous discussions with the industry about such innovative approaches. Some of these ideas focus not only on the training and improving the safety consciousness of the individual young driver but also on the speed and safety of the car that he or she is driving. Another idea which comes forward from time to time is the acceptance of restrictions by the young driver. An example of such a restriction would be an agreement to drive within a specified time which would exclude the hours from 11 p.m. to 4 a.m. when the most damaging accidents occur. The difficulty with any of these approaches, however, is demonstrating that they will have an impact on claims and risk. Without such assurances the industry is reluctant to reduce premiums.
As Deputy Kirk is aware, I cannot intervene directly with the insurance companies in the matter of premium levels. EU legislation prevents Governments or insurance supervisors from exercising a role in relation to policy terms or pricing. Any changes in circumstances affecting the risk insured has to be assessed by the insurer from an underwriting standpoint.
I can only assure Deputy Kirk that I am as concerned as he about the cost of insurance for young drivers and I will continue to explore innovative proposals such as his with the insurance industry. There is no escaping the reality, however, that premiums charged must be a realistic reflection of the risks involved in the cover being offered.
