asked the Minister for Industry and Commerce the total amount of money paid in motor insurance premia in the last three years for which figures are available.
47.
Written Answers. - Motor Insurance Premia.
43.
asked the Minister for Industry and Commerce the reason for the 32 per cent increase in the net earned premium income of motor insurers between 1984 and 1986; if he expects this trend to continue in 1987 and 1988; and if this indicates that there should be an easing in the conditions on which motor insurance is offered, particularly to young drivers.
I propose to take Questions Nos. 43 and 47 together. The amount of gross written premiums in the motor insurance class of business in the last three years for which figures are available is as follows—
|
Year |
Gross Written Premium |
|
1984 |
£298.7m. |
|
1985 |
£335.5m. |
|
1986 |
£361.0m. |
The 1984 and 1985 figures include average premia for the Insurance Corporation of Ireland (under administration) which provided results for the 24 months period ended 31 December 1985.
Gross written premiums increased by 12.3 per cent in 1985 over 1984; while in 1986 they increased by 7.6 per cent over the 1985 levels. The increase in the net earned premium income of motor insurers over the period 1984 to 1986 was 24 per cent account being taken of the ICI data.
In the main, increases in the numbers driving and increases in premium rates to meet the cost of claims gave rise to these increases. Notwithstanding the premium increases motor insurers incurred underwriting losses in the order of £32 million, £23 million and £18 million in 1984, 1985 and 1986 respectively.
As the cost of insurance is directly related to the level of claims occurring the important task is to reduce the number of accidents and the number and cost of claims. Determined action is being taken by Government to bring about these reductions and is an integral part of the Programme for National Recovery. Insurance industry representatives have given assurances that reductions in insurance premia including a better deal for young drivers will follow the introduction of an improved framework and I will ensure that they live up to their promises.
There has already been a considerable slow down in the number and size of price increases notified to my Department. There are also signs of an easing of terms and increased competition for motor risks. One insurance company has recently introduced a special rate capping scheme which establishes absolute maximum premium levels for young motorists and I am hopeful that these encouraging developments will continue.
The fact remains, however, that only when the number and cost of claims is reduced significantly in overall terms will it be possible for insurance companies to offer reductions in premium levels. To do this it will be necessary, in addition to the action being taken by Government, for the motoring public generally, and young motorists in particular, to improve standards of driving and road safety.