Dáil Éireann Debate, Thursday - 17 June 2004
34 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which motor and public liability insurance here is higher than in most other EU countries; the action or actions she proposes to take to deal with the issue; and if she will make a statement on the matter. [18095/04]
View answer83 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the way in which the relative position of public liability insurance costs here and those throughout Europe have changed in recent times with a view to benefiting the consumer here; and if she will make a statement on the matter. [18221/04]
View answer84 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which she has taken steps to bring public liability insurance costs here into line with those prevailing in other EU states; and if she will make a statement on the matter. [18222/04]
View answer86 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which motor insurance costs here are out of line with those in other EU states; and if she will make a statement on the matter. [18224/04]
View answerI propose to take Questions Nos. 34, 83, 84 and 86 together.
The European Insurance in Figures June 2003 report published by the Comité Européen des Assurances, or CEA, shows details of average non-life premia per inhabitant. Those figures include motor and public liability insurance.
The figures for 2001 which are the latest given, show that of 29 European countries listed, Ireland ranked fourth highest, with a value of €1,123, Luxembourg was highest, with a value of €2,084, Switzerland was second highest, with a value of €1,642, the Netherlands were third, with a value of €1,125. The United Kingdom, with a value of €1,072, was fifth-highest. Estonia was second-lowest, with a value of €67, and Turkey was lowest, with a value of €23. The average premium in Europe in 2001 was €581.
The ratios must be analysed carefully. The figures comparing premium amounts to the number of inhabitants do not correspond to sums actually paid by those insured, and in addition they do not always include only or all premia paid by the inhabitants of the country concerned. In Luxembourg, for example, insurers largely benefit from freedom to provide services, or FOS, whereby any insurer authorised to write business in the EEA may provide insurance into any other member state. Countries like Switzerland, Ireland and the UK have a high density of insurance.
The difficulties caused by high insurance premia for all sectors are of great concern to the Government. The agreed programme for Government includes a commitment to tackling the high cost of insurance, and it is the Government's firm intention to implement the necessary measures indicated therein.
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 chair a ministerial committee established to drive the co-ordinated implementation of the reform programme across the relevant Departments and other bodies concerned. Substantial progress is being made on a range of measures that will radically overhaul the functioning of the insurance market and help tackle the high cost of insurance. The key measures include: implementation of the recommendations in the Motor Insurance Advisory Board action plan within a target timeframe; and establishment of the Personal Injuries Assessment Board. The Personal Injuries Assessment Board Act was signed into law on 28 December 2003. The board was established and members appointed on 13 April 2004. The PIAB commenced dealing with employer liability cases from 1 June 2004, and it is my intention that it commences dealing with motor and public liability claims from autumn 2004. A book of quantum — an aid for assessing the level of compensation based on the type of injury involved — which is essential for the successful operation of the PIAB, was published by PIAB on 2 June 2004 and the undertaking by my Department and the Competition Authority of a joint study into the insurance market. The study will identify and analyse barriers to entry and limitations on rivalry in the insurance marketplace. The bulk of the study was completed in 2003, and a preliminary report and consultation document on competition issues in the non-life insurance market was published on 18 February 2004. Following consultation, a final report will be published later in the year which will contain recommendations based on the findings.
Significant progress has been made by the Department of Transport regarding the implementation of the road safety strategy. For example, the introduction of the penalty points system has already reduced the number of accidents on our roads, which has benefits far beyond the cost of insurance. Two new road traffic Bills are expected to be enacted by the end of July 2004. The Minister for Justice, Equality and Law Reform, Deputy McDowell, published the Civil Liability and Courts Bill on 11 February 2004, and it is currently before the Houses of the Oireachtas. That Bill contains measures to streamline the law regarding personal injury claims, including measures to deal with fraudulent and exaggerated claims.
While EU law prohibits the imposition of price control on insurance, I have made it clear that I consider there to be an onus on the insurance industry to ensure that the reforms to be taken will have the effect of significantly reducing the cost of premia to consumers and businesses. Indications to date are that the reform programme is having its desired effect. The CSO publishes monthly indices of costs for a number of classes of insurance. Those statistics show that there was a reduction of 12.9 index points, or 12.1%, in motor car insurance between the months of October 2002, when the programme was launched, and April 2004, which is the latest figure available. Reductions are also beginning to occur in the cost of employers' liability and public liability insurance premia, which represent a significant burden for businesses. As implementation of the reform programme continues, I expect further reductions to occur in all forms of insurance. I am also confident that the measures that the Government is putting in place to reform the Irish insurance market will attract new players into the market leading to further downward pressure on premia.
