Dáil Éireann debate -
Wednesday, 12 May 1999

Vol. 504 No. 5

Written Answers. - Motor Insurance Industry.

Jack Wall

Question:

39 Mr. Wall asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps, if any, she will take to prevent insurance companies from unfairly increasing the premia paid by people who live in certain areas or categories of people such as burdened borrowers; and if she will make a statement on the matter. [12230/99]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

The Deputy may be aware that I addressed this House on this issue on 24 March. I assume the Deputy is referring to recent press reports of comments attributed to the chief executive of the Hibernian group regarding a review of its underwriting criteria.

Motor insurance underwriting criteria are normally based on underwriting experience including trends in the level, frequency and cost of claims for particular risks and classes of risk and are a matter of judgment by individual private insurance companies. Any changes in circumstances affecting the risk insured would have to be assessed by the insurer from an underwriting standpoint and the premiums charged will reflect any material increase in the risk. Increasing use is being made by insurers of technology in segmenting risk categories into more discrete groupings. This technology should give insurance underwriters the tools to examine claims performance with more accuracy.

In the light of normal practice in this regard, I was surprised by the comments attributed by the press to the chief executive of Hibernian Insurance regarding proposed alterations in their assessment of motor risks. I was also concerned at the implications that these alterations may entail for targeted motor insurance policyholders. Accordingly, I requested our officials to urgently seek clarification on the issue from the company. I also forwarded papers regarding this matter to the motor insurance advisory board for its immediate attention and appraisal. The company subsequently assured both the chairperson of the motor insurance advisory board and myself that the Hibernian group did not propose to alter its standard underwriting practices: that it did not intend to inquire into any individual's personal financial circumstances or use such information as a factor in quoting for motor insurance. The company confirmed that their underwriting criteria will continue to be dependent on an individual's historic claims, car type and engine capacity, driver age and experience, gender and whether they live in an urban or rural area.

In a separate letter to me, Hibernian repeated the assurances they had given to the chairman of the motor insurance advisory board and confirmed that they do not discriminate against customers in selected addresses nor do they discriminate against persons because of their personal borrowing commitments. If that were so, it would raise certain ethical questions and matters of concern in the public interest. I am satisfied that the Hibernian group will continue to assess applicants for motor insurance in the normal manner.