Finian McGrath
Question:46 Mr. F. McGrath asked the Tánaiste and Minister for Enterprise, Trade and Employment the position regarding developments in the reduction in the price of insurance. [31840/03]
Written Answers. - Insurance Industry.
The CSO publishes monthly indices of costs for a number of classes of insurance. These statistics show that there was an increase of 37.6 index points, 54.4%, in motor insurance between October 1998 and October 2002. I am pleased to report that there was a reduction of 8.4 index points, 7.9%, in motor insurance between October 2002 and October 2003.
The Irish Financial Services Regulatory Authority, IFSRA, which came into being on 1 May 2003, has a wide regulatory remit, covering consumer protection and prudential supervision of practically all of the financial services, including insurance. One of the recommendations in the report of the Motor Insurance Advisory Board relates to gathering of statistics on motor insurance and claims costs by IFSRA. Last week IFSRA published its first set of comparative tables of motor insurance quotations on its website. Regular surveys will be published on the IFSRA website at three monthly intervals.
The annual insurance report contains information on aggregate insurance premiums paid to insurance companies in respect of various classes of business. Responsibility for publishing this report has transferred from my Department to IFSRA.
While the pricing and underwriting of insurance is a matter for individual insurance companies and EU law prevents Governments from intervening in relation to the matter of premium levels or in respect of what risks they are prepared to underwrite, Governments are free to take action to improve the functioning of the insurance market.
The insurance reform programme that I announced on 25 October 2002 comprises a comprehensive set of inter-related measures designed to improve the functioning of the Irish insurance market. I have made it clear that I consider there to be an onus on the insurance industry to ensure that the reforms to be undertaken will have the effect of significantly reducing the cost of premia to businesses and consumers. Indications to date are that the reform programme is having its desired effect, as is illustrated by the reductions in motor premia to which I have already referred. More reductions are expected. Reductions are also expected in employers' liability and public liability insurance premia, which represent a significant burden for businesses.
I am confident that the measures the Government is putting in place to reform the Irish insurance market will attract new players into the market and lead to further downward pressure on premia.