I propose to take Questions Nos. 72 and 73 together.
Following the establishment of the Irish Financial Services Regulatory Authority and the coming to an end of my Department's lead role in the insurance reform programme, my colleague the Minister for Finance retains overall responsibility for policy and legislation in relation to the provision of financial services in Ireland. My colleague, the Minister for Transport, in the light of broader responsibility for road safety will take over the lead role in relation to policy and legislation on the availability and cost of motor insurance and any related inter-departmental co-ordination. The transfer of responsibilities to my colleague, the Minister for Transport, has been agreed and will be activated shortly following the completion of logistical issues relating to the transfer of an agreed number of posts from my Department to the Department of Transport.
The pricing and underwriting of insurance is a matter for individual insurance companies and EU law prevents Governments from intervening directly in relation to premium levels. However, Governments are free to take measures to improve the operation of the insurance market.
The CSO consumer price index statistics show that there was a reduction of 15.2 index points, 14.1%, in motor car insurance between the months of April 2003 — when the cost of private motor premia peaked, index 108.0 — and August 2004, which is the latest figure available, index 92.8. The CSO index is based on averages but individual policyholders have done much better as can be seen from data provided by the Motor Insurance Advisory Board.
Examples provided by MIAB for three specific companies between March 2003 and March 2004 indicates the following reductions: 10% to 16% in comprehensive insurance for a 30 year old male; 10% to 41% in comprehensive insurance for a 50 year old female; and 10% to 45% for third party, fire and theft insurance for a 21 year old male.
Recent reform measures taken have led to a better functioning insurance market. We are seeing enhanced profits reported by the Irish Insurance Federation and significant premium reductions which must continue as the full impact of the reform programme is felt. These new operating conditions in the insurance market enhance the attractiveness of the market to prospective new entrants. The insurance market is growing. Gross written premiums increased to over €4 billion in 2003 compared to just €2 billion in 1998. As the economy continues to grow, the insurance market will also continue to grow in size. Competition from new entrants attracted by better market conditions will be an important element in ensuring continuing downward pressure on premia.
