I thank the Ceann Comhairle for selecting this important topic. There are three words to describe the implications of today's MIAB report for the Minister's approach to motor insurance and indeed insurance generally: negligence, negligence, negligence. The long-awaited MIAB report challenges virtually every conviction of the Minister as it relates to motor insurance. For the five years he has been in office, the Minister has procrastinated. His reign has been characterised by inaction and paralysis. The recommendation for the personal injuries tribunal to quickly and more cheaply process claims where liability is not contested, which was recommended by the McAuley group in 1997, has not been implemented. Most of all, the Minister has been negligent in respect of his duties, the exploitation of drivers, young and old, the need for reform of the legal system as it interacts with the insurance industry and in the area of competition enforcement. The Minister's negligence in all these areas has played to one gallery only, the vested interests which profit from and thrive as a result of that negligence.
The Minister has also tried to hide information, suppress analysis and bury the interim work of the MIAB. The members of the MIAB, particularly the chairperson, deserve our thanks and congratulations for their perseverance and diligence in their research and for the clarity of their work.
To crown his negligence, the Minister this morning had the audacity in his press release accompanying publication of the MIAB report to claim authorship of that report, having valiantly striven to keep it under wraps, delay it and pour cold water on the MIAB analysis, as evidenced in his comments on the interim report which was not published and only entered the public domain as a result of a freedom of information request. He unbelievably headlined the press release, Treacy's report to spearhead moves to tackle the high cost of motor insurance –"Treacy's report" no less, not the Dowling report or the MIAB report.
The Minister, in his press release, remarked on "the credibility of the detailed analysis". That analysis appears little different in its thrust from the analysis contained in the MIAB interim report. The Minister's response to that analysis, when the report saw the light of day as a result of an FOI request, was to justify his concealment because "there were serious deficiencies in the raw date." He went on to talk about "flawed information", while at the same time making clear his conviction that the insurance industry would ultimately establish its case.
Now the Minister talks of "the credibility of the detailed analysis" and observes that "The Board . . . pulls no punches in contending that vested interests and inefficiencies may collectively account for as much as half the premium paid by law-abiding motorists." Where has the Minister been? What has he been doing in respect of these vested interests? He certainly has not been attending to the cause of exploited motorists, young and old.
The level of exploitation and profiteering evident and described in the report is truly astounding. Vested interests and inefficiencies may account collectively for as much as half the premium paid by motorists – 50 cent in the euro of every premium ends up in the pockets of vested interests or wasted in inefficiencies.
Profiteering on a vast scale is practised by insurers in relation to young female motorists. The insurers pocketed a profit of £300 per policy year from such policyholders for the period analysed by the advisory board. This compares with a profit of £16 per policy year for all policyholders over the age of 24. Young women account for almost half of all young insured drivers. This is a vast exploitation and most serious wrongdoing on the part of very large and very rich international corporations.
We now discover that even young males, whom we have been told incessantly by the industry are hugely problematic, are not so problematic. Those aged 17 to 24 with full driving licences are profitable, generating a profit per policy year of £125 for the period analysed by the board. This group represents 24% of all young policyholders aged 17 to 24. This is a smaller percentage than young women but must reflect the problems these young people have in getting cover at all, never mind at a fair and equitable price. This is exploitation. The problem group is that of young male drivers on provisional licences. I hope we will discuss that category next week.
In addition to the massive exploitation discovered by the MIAB, the board discovered – surprise, surprise – massive profit taking by insurance companies as a result. For the period analysed they are vastly more profitable – 11 times more so – than their counterparts in the UK, which Mike Kemp of the Insurance Industry Federation at lunchtime on RTE radio effectively described as an 11 year statistical quirk. It is some quirk.
It is over a year since I wrote to the Equality Authority, on 29 March 2001, requesting that the Minister fund it to conduct an inquiry into allegations of discriminatory practices based on age or gender under the Equal Status Act. Only on receipt of today's report has the Minister finally referred the issue to the Equality Authority. Despite all the harrying by me and colleagues in this House, he still has not implemented the recommendation relating to the personal injuries tribunal, now called the Personal Injuries Assessment Board. Meanwhile, young drivers have had confirmed for them today that they have indeed been ripped off by the insurance industry, but the Minister with responsibility for commerce has not implemented one reform in five years.