Ceist:
35 Mr. Hayes asked the Tánaiste and Minister for Enterprise, Trade and Employment when she will bring forward proposals to reduce motor insurance premia for young people under 30 years of age. [18327/97]
Written Answers - Motor Insurance Costs.
Ivor Callely
Ceist:45 Mr. Callely asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the view that young and inexperienced motorists should be encouraged to have adequate insurance cover; if her attention has been drawn to difficulties and obstacles put in place rather than encouragement in this regard; her views on the fact of premium levels being charged; and if she will make a statement on the matter. [18282/97]
Ivor Callely
Ceist:85 Mr. Callely asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures, if any, available to her to ensure cheaper and more realistic motor insurance premiums for young drivers; her views on the current situation; and if she will make a statement on the matter. [18382/97]
Ivor Callely
Ceist:86 Mr. Callely asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the availability and cost of insurance cover for the young driver; the number of reports which have been commissioned by her Department on this issue over the past ten years; if she will give details of the findings and recommendations for each report; and if she will make a statement on the matter. [18383/97]
Nora Owen
Ceist:91 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment the action, if any, she will take to reduce the cost of motor insurance for young people. [18389/97]
I propose to take Questions Nos. 35, 45, 85, 86 and 91 together.
I refer the Deputies to a comprehensive and detailed reply which I gave to the House on 21 October 1997 in respect of a written question concerning the cost of insurance for young drivers. On that occasion I outlined initiatives being pursued in this area following recommendations contained in the Deloitte & Touche report of October 1996 on insurance costs and other parallel measures being pursued by the Irish Insurance Federation and National Safety Council. The Deloitte & Touche report is the major report on insurance costs commissioned by my Department in recent years.
In a reply to a written question on 8 October 1997 I referred to the wide variation of available insurance quotes, as between insurance companies and as between the various categories of driver surveyed, including young drivers.
As stated in my previous reply on 21 October last, the facts as established by Deloitte & Touche in its report on an economic evaluation of insurance costs in Ireland are that premium rates for young drivers are high in all EU countries relative to rates charged to more mature drivers. The report found that the average cost of an insurance claim for 17-24 year old drivers is over twice that for the 36-40 age group. The report also found that motorists in the 17-24 age group are responsible for over three and a half times the average claims cost in the 36-40 age group.
An earlier survey undertaken by the Motor Insurance Advisory Board in 1993 found that in the age groups examined, 17-24, 25-30 and 30+, under both comprehensive and non-comprehensive cover in terms of relative claims cost, the 17-24 year old policyholder is a greater risk than those aged 25-30, who in turn are a greater risk than those aged over 30 years.
The National Roads Authority report for 1996 indicated that almost 38 per cent of the motorists involved in fatal and personal injury accidents were young drivers and that 40 per cent of the road casualty victims in 1996 were between the ages of 18 and 34.
To adhere to statutory solvency requirements insurers must be free to set premiums based on their underwriting experience. The question of spreading premium rates more evenly across the different risk categories of motorist was, however, considered by Deloitte & Touche who concluded that reducing premiums for young drivers at the expense of increasing premiums for the mature and safer motorist would reduce the incentive for safer driving. Furthermore, by increasing the young high-risk motorists' pool, it would result in an overall increase in claims costs with consequent higher premiums for all motorists.
Given the adverse insurance claims and accident statistics in regard to motorists in the 17-24 year age group, it is not surprising that many insurance companies are reluctant to quote for that particular risk although an insurance quote will always be available under the declined cases committee mechanism unless contrary to the public interest.
I indicated previously to the House some of the measures and initiatives being undertaken to try to improve the driving standards and accident record of young drivers such as the proposal to introduce a graduated licensing system for learner drivers under examination by the Department of the Environment and Local Government, the introduction of insurance discounts to young drivers who have completed a required number of driving lessons and the work of the National Safety Council in producing educational material on road safety for primary and secondary schools. However, I wish to again make it clear that there is no soft option or panacea for reducing motor insurance premiums for young drivers in view of their high risk insurance profile. The Deloitte & Touche report concluded that an improvement in driving skills and the inculcation of safer driving standards are the key to reducing the relatively high accident rate of the young driver category which should lead to lower insurance premium quotations.