asked the Minister for Industry and Commerce whether any new initiative will be taken to ease the insurance rates of young drivers of proven record under 25 years of age and if he will make a statement on the matter.
Written Answers. - Motor Insurance.
112.
I am aware of the burden which high insurance costs impose on all sections of the motoring public and I intend to do everything practicable to alleviate this burden where possible. I am particularly anxious to improve the position of young drivers. However, the cost of insurance is directly related to the level of claims occurring.
The motor insurance industry in Ireland has had significant underwriting losses in recent years. In the absence of a change in the underlying claims experience lower insurance rates for young drivers would mean higher rates for other categories of driver. More mature drivers have been statistically proven to be safer drivers than their younger counterparts whose rates reflect the higher risk. As the insurance supervisory authority, my primary responsibility is to ensure that companies are maintaining their solvency margins and reserve requirements. I must, therefore, respect the right of insurers to charge economic premiums in the light of their underwriting experience. The initial loadings imposed on first time insureds and more specifically young drivers can be offset over time by earning a no-claim bonus. The question of giving some credit to first time policyholders who have previously been insured on a named driver basis on another policy (e.g. their parents') and are accident free is being pursued with the insurance industry. Independently of this, a major insurance company has just introduced a scheme of accelerated no claims bonus for certain categories of younger drivers in order to reduce the amount payable by such drivers as quickly as possible following a safe driving record. It is hoped that other companies may follow this lead.
The fact remains, however, that it is only when the number and cost of claims is reduced significantly in overall terms that it will be possible for insurance companies to consider reductions in premium levels. To do this it will be necessary for the motoring public generally, and young motorists in particular, to improve standards of driving and road safety.