There has already been extensive examination of the factors contributing to the relatively high level of insurance costs in Ireland. Insurance price movements are normally based on the underwriting experience of companies, as well as trends in the level, frequency and cost of claims. The high transaction cost of claims, particularly legal costs, has been identified as one of the major factors driving up the cost of personal injury settlements.
For some time now, this Government has been concerned at the high, and increasing, cost of insurance. I am aware of the difficulties being experienced by some companies due to these costs. The decision of this Government to establish a personal injuries assessment board by next year seeks to address the issue of the high cost of settling claims by achieving a reduction in the delivery cost of personal injury compensation for work related injuries.
In addition, a workplace safety group has been established with a view to improving health and safety standards in the workplace. The objectives are to reduce workplace accidents, encourage injured workers to return to the workplace at the earliest possible date and improve claims handling procedures, thus reducing insurance costs. The group is developing proposals designed to bring the initiative to small and medium sized firms.
Since the transposition into Irish law of the EU Third Life and Non-Life Insurance Directives in 1994, insurance companies authorised in any member state may provide insurance cover throughout the EU on the basis of their home country authorisation. This has opened up the Irish market to competition from insurance providers in other EU countries. In addition, the removal of the cap on brokers' commission will encourage further competition in the Irish market.