Dáil Éireann debate -
Wednesday, 22 Nov 2000

Vol. 526 No. 4

Written Answers. - Insurance Costs.

Andrew Boylan

Question:

136 Mr. Boylan asked the Tánaiste and Minister for Enterprise, Trade and Employment the actions taken to date to implement the recommendations of the Deloitte & Touche report, 1996 on the economic evaluation of insurance costs. [26690/00]

Denis Naughten

Question:

170 Mr. Naughten asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she has to act on the 1996 Deloitte & Touche report into the insurance industry; and if she will make a statement on the matter. [26692/00]

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

I propose to take Questions Nos. 136 and 170 together.

The Deloitte & Touche Report on the Economic Evaluation of Insurance Costs in Ireland, published in 1996, made a number of key recommendations. The report indicated that high insurance costs in Ireland were directly related to high claims costs. In particular, the report found that the average cost of an insurance claim for 17 to 24 year old drivers, was twice that for the 36 to 40 age group. The report also noted that motorists in the 17 to 24 age group were responsible for over three and a half times the total average claims costs incurred for motorists in the 36 to 40 age group.

The report clearly indicated that the primary focus of initiatives aimed at reducing the cost of motor insurance for young drivers, must be on reducing the frequency of accidents and the associated cost of claims. The key to this is to create appropriate conditions for improving their standards of driving and their appreciation of road safety.

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 gardaí, continue to promote anti-speeding and anti-drink driving media campaigns, including road safety educational programmes, for second level school students.

The report also found that the main contributory factors to rising premium 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. 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's final report was recently circulated, along with a draft memorandum for Government. It is intended to bring the matter before Government as soon as possible and to publish the group's report at that stage.

Improved health and safety measures in the workplace, were also identified by the report as a way of reducing insurance costs. As part of the commitment to improving standards of safety on the workplace, the workplace safety group is promoting a workplace safety code on safe working and accident prevention.

The Motor Insurance Advisory Board, which I re-established in 1998 to provide information and advice on trends in motor insurance costs, is progressing well with its work.