Dáil Éireann debate -
Tuesday, 4 Feb 1997

Vol. 474 No. 3

Written Answers. - Motor Insurance.

Cecilia Keaveney

Question:

224 Cecilia Keaveney asked the Minister for Enterprise and Employment the assistance, if any, given by his Department to restrain car insurance levels particularly for the young in terms of policy by his Department;and if he will make a statement on the matter. [3053/97]

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

I am aware of consumer concerns relating to the cost of motor insurance. Against this background, I commissioned the Deloitte & Touche consultancy report which examined the question of the cost and availability of motor insurance, including the cost for young people.

I have spoken on numerous occasions to the House in regard to the position of young and inexperienced drivers as a high risk category. The established facts in this regard, which I have previously detailed in response to similar questions, are as follows: the most recent statistics published by the National Roads Authority show that (a) almost 38 per cent of the motorists involved in fatal and personal injury accidents in 1995 were young drivers and (b) 41 per cent of the road casualty victims in 1995 were between the ages of 18 and 34. The analysis provided by the sixth report of the motor insurance advisory board showed that claims frequency declines with age of policyholder for all types of cover. The analysis also showed that, in terms of relative claims cost, the 17 to 24 year old policyholder is a greater risk than those aged 25 to 30, who in turn are a greater risk than those aged over 30.

The Deloitte & Touche report on an evaluation of insurance costs in Ireland provides further evidence of the high cost of claims associated with the young driver. The consultants found that the average cost of an insurance claim for a 17 to 24 year old driver is over twice that for a 36 to 40 year old driver and that motorists in the younger age group are responsible for over three and a half times the claims costs of motorists in the 36 to 40 group. Given these facts, it is not surprising that young drivers may experience difficulty in obtaining quotations for motor insurance and that, from an underwriting and solvency perspective, insurers will quote relatively high premiums to young and inexperienced drivers.

The Deloitte & Touche report concluded that the inculcation of safer driving standards in young drivers is the key to reducing their high accident rate and to obtaining lower premium quotations. That report also indicated that drivers with good claims experience have seen their insurance premiums reduced in real terms since 1990. In this regard, I would draw the Deputy's attention to the specific recommendations by Deloitte & Touche in relation to the possible introduction of a graduated licensing system for learner drivers similar to a model in force in Ontario. I understand that my colleague the Minister for the Environment is to undertake an examination of the Ontario model in the context of current law and practice in Ireland. I would also point out that an insurance incentive scheme has been established by agreement between the Irish Insurance Federation and the Driving Instructors Register (DIR) whereby insurance discounts will be offered to young drivers who have completed an agreed number of driving lessons over a calandar year. The National Safety Council is also working to produce course material on road safety to fit in with the new primary school curriculum and has recently adopted a five year road safety programme which includes the development of educational material in 1998 for transition year students in secondary schools. Some schools are also offering driving training courses on a commercial basis.