asked the Minister for Industry and Commerce if he will initiate a careful examination of the profit structure of insurance companies with a view to ascertaining if some of the profit in the companies' overall business could be diverted to ameliorating motor insurance premiums especially those of young drivers starting in their first job who are at present penalised because they are under 20 years of age although they are prime targets for selling campaigns for life assurance policies.
Ceisteanna—Questions. Oral Answers. - Insurance Companies' Profit Structure.
It is probably true that there has been a certain amount of subsidisation of motor insurance, which has incurred heavy losses in recent years, by other and more profitable classes of insurance, but I would not regard it as desirable that such a position should continue indefinitely. There is no reason why any class of driver should be subsidised by others—for instance, by home owners insuring against fire. I might point out in any event that the great majority of young drivers are insured with a company which up to recently did motor business only and so has not other resources from which its motor business or any part of it could be supported from outside the motor area.
I am concerned at the high level of premiums that young drivers are now being charged. At present the Motor Premiums Advisory Committee are conducting a statistical exercise to establish the appropriateness of the levels of loading including the loading on young drivers. I have also just received from the Examiner of Restrictive Practices a report for which I had asked him on competition in the motor insurances market, and I am having it examined urgently. My intention is that full and open competition should return to the motor market and it may be that very high premiums for young drivers can be avoided by a better rating structure. The companies are well aware of my intentions in this matter.
In case there is any misunderstanding, in view of the reference to life assurance, I would inform the Deputy that in this country non-life insurance companies cannot be licensed to undertake life assurance business.