Written Answers. - Motor Insurance.
Ivor Callely
Question:
123
Mr. Callely
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the measures, if any, available to her to help reduce the cost of motor insurance particularly for young drivers; the progress on re-establishing the motor insurance advisory board; and if she will make a statement on the matter.
[3605/00]
Concerns about the level of premiums for motor insurance have caused our Department to examine the factors contributing to the relatively high level of those premiums with a view to determining whether there is any action which can be taken to effect a reduction in them. This has focused on a number of the key cost elements including the levels of personal injury compensation and the costs associated with settling compensation claims. Concurrent with this examination, efforts are being made to identify measures which both individually and cumulatively could have a moderating effect on insurance costs.
The 1996 Deloitte & Touche report on the economic evaluation of insurance costs found that the main contributory factors to rising pre mium costs were the high legal costs component of small claim settlements, the faster rate of medical cost inflation, and the high level of general damages awards relative to special damages in smaller claims. Following consideration by Government of the consultants' report and recommendations, a special working group was established to advise on the establishment of a personal injuries tribunal and to examine issues surrounding alternative systems of personal injury compensation in operation in other jurisdictions. The group will present its final report shortly. In the light of its report, I will consider what follow up to the work of this group is necessary.
The Motor Insurance Advisory Board, which I established last year to provide information and advice on trends in motor insurance costs, is progressing well with its work.
Greater attention to safety on the roads can further reinforce insurance cost reduction measures at Government level. A number of initiatives are in place and are being taken, to improve driving standards and safety awareness among all drivers, including young drivers. The Irish Insurance Federation, in conjunction with the Driving Instructors' Register, has introduced a scheme of insurance premium discounts for the young driver on completion of a required number of driving lessons. The National Safety Council, in co-operation with the Garda, continues to promote anti-speeding and anti-drink driving media campaigns including road safety educational programmes for secondary school students.
The most effective way of ensuring that the Irish consumer is getting the most competitive quotes from insurers, is to have as many insurers as possible competing on the Irish market. It would appear that the implementation of EU legislation, opening up the EU market to competition from all European insurers, has had a beneficial effect on competition in the Irish market. More recently, the abolition of the cap on brokers' commissions should introduce further competition into the market.
