Dáil Éireann díospóireacht -
Thursday, 25 Jan 1996

Vol. 460 No. 5

Written Answers. - Motor Insurance.

Noel Treacy

Ceist:

28 Mr. N. Treacy asked the Minister for Enterprise and Employment when common European insurance assessment will be introduced into Ireland in order to provide adequate, fair, reasonable and cost-effective insurance for young people up to the age of 25; the current position pertaining to the opportunities available for these young people in our country; the number of insurance companies providing this cover for motor vehicles; the progress being made by him in order to provide competition in this area; the current position vis-á-vis European directives; and if he will make a statement on the matter. [1588/96]

Minister for Enterprise and Employment (Mr. R. Bruton)

I must inform the Deputy that there is no common European basis of assessment of under 25 age drivers for insurance purposes and there are no EU proposals pending in this regard. While the underwriting criteria used by insurers throughout Europe such as type and make of motor vehicle, driver's age, experience, use of motor vehicle, geographical area and driving record are similar, other relevant factors, such as demographic profile, accident and claims frequency and cost of claims under different compensation regimes are not common throughout Europe but differ between member states.

Currently there are 27 insurers, excluding Lloyds, established in Ireland providing motor vehicle insurance cover and with the emergence of direct line insurers, I am satisfied that there is a healthy and growing level of competition in this market.

Motor insurers' assessment of risk is based on claims frequency experience. The degree of risk tends to decrease with age and maturity and the level of premiums charged to young drivers reflect the insurers' claims experience of such drivers as a higher risk category. Moreover, the number of companies offering this type of insurance will reflect the high risk nature of this class of business.

The House will already be aware that I have commissioned an economic evaluation of insurance costs in Ireland and of the key factors contributing to the cost of insurance in Ireland. The consultants have been asked to evaluate the impact of liability insurance premiums on the cost competitiveness of the trade business sector in Ireland. In addition, the evaluation of the economic impact of private motor insurance costs with particular regard to the cost of motor insurance for young drivers is being examined as a separate aspect of the consultancy study. Preliminary indications suggest that the under 25 age group, as a category of driver, are not significantly disadvantaged in terms of opportunities for employment under the current motor insurance regime.