Dáil Éireann debate -
Wednesday, 28 Feb 1996

Vol. 462 No. 3

Written Answers. - Motor Insurance Costs.

Michael P. Kitt

Question:

23 Mr. M. Kitt asked the Minister for Enterprise and Employment if his attention has been drawn to the recent media coverage of motor insurance rates leading to conflicting comments on increases and reductions; and if he will make a statement on the current situation on motor insurance rates. [4513/96]

Ivor Callely

Question:

37 Mr. Callely asked the Minister for Enterprise and Employment the progress, if any, made to ensure that young people can obtain motor insurance at an affordable cost; and if he will make a statement on the matter. [4236/96]

Minister for Enterprise and Employment (Mr. R. Bruton)

I propose to take Questions Nos. 23 and 37 together.

In relation to the cost of motor cover for young drivers I should point out that the level of premiums charged to young drivers tends to reflect insurers' claims experience of such drivers as a high risk category and the relatively small number of companies offering this type of insurance is also a clear indication of the high risk nature of this type of business.

Reduction in motor insurance premium rates have been announced recently by the Guardian Group of up to 10 per cent in their motor insurance premium rates for new and existing customers and these have been widely reported on in the media. Premier Direct Insurance also have followed this encouraging course by announcing motor insurance premium rate reductions of up to 14 per cent in certain cases. I would like to take this opportunity of welcoming the reductions by Guardian and Direct Insurance and I hope that other insurers will now follow suit in setting their motor insurance premiums at suitably competitive levels.

I view these rate reductions as a vindication of the efforts of the gardaí in their continued enforcement of road traffic legislation and in the implementation of drink driving and other measures. It is my belief that the reductions should also be perceived as a material reward to motorists for their improved levels of safety and vigilance.

The House will be aware that I have commissioned a report on the economic evaluation of insurance costs in Ireland and of the key factors contributing to the cost of insurance in Ireland. The consultants have been asked,inter alia, to evaluate the economic impact of private motor insurance costs as a separate aspect of the consultancy study, having regard to the relatively high cost of motor insurance for young drivers, and to recommend appropriate measures based on their analysis of the problem. I am awaiting finalisation of that report by the consultants.