asked the Minister for Trade, Commerce and Tourism the number of insurers writing motor insurance in this country; the number insured by the various motor insurers; and if he will give an estimate of their total premium income for 1983.
Ceisteanna—Questions. Oral Answers. - Insurance Companies.
1.
There are at present 26 insurers writing motor insurance in the country and it is estimated that they provide cover for approximately 650,000 private motor cars.
Nineteen hundred and eighty-two is the latest year for which total market figures are available and in that year net earned premium income for motor insurance amounted to approximately £202 million.
With regard to the 1 per cent compensation fund which has been referred to recently, have arrangements been made to levy the 2 per cent on the 26 companies?
Yes, arrangements are being made at the moment.
Have any of the 26 companies indicated that they will not be in a position to meet the levy?
We have no indication of that at all. The co-operation we have received from the industry has been extremely helpful and is appreciated.
2.
asked the Minister for Trade, Commerce and Tourism if his Department, as the supervisory authority, is satisfied that all non-life insurers writing insurance under licence in this country have sufficient reserves to deal with all claims which have arisen and may arise.
As the Deputy may be aware, there are 38 companies authorised to conduct non-life insurance business in Ireland and their financial results vary from year to year. In view of this it would be unwise to state categorically, at any given moment, that the reserves position of every authorised insurer is satisfactory.
However, I can state that with the exception of the case of which the Deputy is aware, there is no reason to be worried about the financial position of the authorised insurers. The examination of their accounts is, of course, an on-going process and any matters which appear to call for special consideration will receive immediate attention.
Is the Minister aware that out of approximately 38 general insurance companies throughout the country according to the statistics in the Minister's own blue book, about 25 of those doing business recorded substantial losses last year and half of those losses were in excess of £2 million? The prognosis is that there will be an even worse situation in 1983. Does that not indicate that what is regarded generally now as a crisis exists in general insurance in Ireland?
I would not accept that a crisis exists in the industry. If that message were to go out from this House it would have very serious consequences for the industry. I am most emphatic, in replying to the Deputy, that there is no crisis. However, I accept that there have been losses in the insurance industry and that trend appears to be continuing. In recognition of that, applications for price increases from the industry have been considered by the National Prices Commission and in the main, with certain exceptions, have been approved by me.
While nobody wishes to create any confusion in the market place concerning the recorded losses of the 25 companies last year, at the same time they are very serious. Does any non-life insurer in the country operate the float system so far as the cover for outstanding claims is concerned besides the one in relation to which the Minister took action recently?
As far as I am aware, and I am subject to correction on this as I have not got my notes, I do not believe the float system is operated by any other company. I will check on that to be quite sure and if that is not the case I will convey it to the Deputy.
Is the Minister aware that during the implementation of the emergency legislation recently there was a lot of talk that there were two other companies who felt that the legislation might have been brought in against them? In those circumstances would he undertake to carry out an immediate review of all matters concerning the crisis which exists in Irish insurance companies at the moment, such as suicide price cutting of premiums and the excessive competition in the business? While the Minister may not recognise the fact, it is articulated by the business that a major crisis in general insurance is looming.
As I indicated to the Deputy, I do not accept and it would be damaging for it to go from this House that there is a major crisis in the insurance industry. The industry is going through a difficult time and there have been losses in underwriting but that is in common with the insurance industry in other European countries. The Irish case is not an isolated one. As I informed the Deputy in reply to a previous supplementary question, applications for price increases in various types of insurance have been reviewed by the prices commission, recommended to me and with certain limited exceptions I have approved those increases in recognition of the difficulties being experienced by the industry. With regard to the other matters the Deputy referred to, such as undercutting and other practices, I have made it quite clear to the industry on a number of occasions that a very serious view is taken by my Department of what could be referred to as gimmick schemes which are brought in to try to attract numbers on their books and which are not prudently estimated, and any losses which may be incurred with insurance companies in introducing those schemes will not be compensated for in any price increases they seek. I am glad to say that that message has been acted on by a number of insurance companies to date.
As the supervisory authority concerned with Irish insurance business, can the Minister confirm that he or his Department have not written to any insurance company concerning their assets or their technical reserves in the recent past?
As I stated in my formal reply, the question of the accounts of insurance companies is an on-going process and I am sure that, as a former Minister in the Department, Deputy Flynn appreciates that. If any matter which needs explanation or clarification comes to the attention of the Department or if any matter causes concern to the Department — it need not be of a major nature — that insurance company are immediately communicated with. I am not aware of any specific cases which Deputy Flynn has in mind but it is normal practice and will continue to be so for my Department, in living up to their responsibilities, to keep in constant contact with insurance companies on a variety of matters relating to their accounts and accountability.