Dáil Éireann díospóireacht -
Thursday, 8 Mar 2001

Vol. 532 No. 3

Written Answers. - Motor Insurance Costs.

Bernard J. Durkan

Ceist:

85 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which motor insurance costs here are in line with those in other European Union member states; the countries of the European Union currently with the lowest motor insurance costs; the countries that have the highest motor insurance costs; and if she will make a statement on the matter. [7309/01]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy):

Making accurate comparisons between motor insurance costs in Ireland and other European countries is difficult due to a number of factors such as type of insurance cover, age groups, types of vehicles and even regional differences within countries. There are also differences in how compensation for motor injuries is paid in these countries. Countries such as France, Germany, the Netherlands, Denmark and Sweden provide compensation benefits almost exclusively through the medium of social security benefits with a high level of earnings-related income support. Ireland, on the other hand, effectively operates two parallel systems of compensation provision, that is, a social security scheme of occupational injury benefits, paid on a flat-rate basis with increases for qualified dependants, while allowing unrestricted access to tort liability claims for compensation for loss of earnings and pain and suffering. A similar system operates in the United Kingdom.

The table below compares the average motor premium per vehicle in a number of European countries in 1997.

Country	Vehicle Premium (ECUs)	As a % of Ireland
Ireland	715	–
Germany	485	67.83%
The Netherlands	475	66.43%
Denmark	449	62.79%
France	445	62.23%
Sweden	293	40.97%

Source: Commission Européene des Assurances – CEA –The European Motor Insurance Market 1997, Brussels, European Union Commission.

Deloitte & Touche management consultants, were commissioned in 1996 to undertake a study on the economic evaluation of insurance costs in Ireland. Comparisons with other jurisdictions were made in respect of motor insurance. This study found that premium rates in Ireland were higher than in the other EU countries surveyed. However, it was pointed out in the report that the continental countries differ so much in the areas of methods of compensation and levels of awards from Ireland and the United Kingdom that it is difficult to make meaningful comparisons.

The Deloitte & Touche report found that apart from differences in compensation systems, the two major factors driving up the cost of personal injury settlements in Ireland were medical inflation and the high transactions cost of claims, particularly legal costs, including the cost of expert witnesses. In response to these findings, a special working group on personal injury compensation was established under the aegis of this Department.

The group's second report together with a memorandum for Government containing the main recommendation of the group is now been finalised and will be considered by Government later this month.