I propose to take Questions Nos. 41 and 42 together.
I am aware of the substantial increases in insurance premiums that many firms are facing and of the problems this is creating for them.
The pricing and underwriting of insurance is, however, a matter for individual insurance companies. EU law prevents us and our Department from intervening in relation to premium levels or in respect of the risks they are prepared to underwrite. Insurers make decisions on provision of cover based on their assessment of that risk.
The insurance industry has pointed to a number of factors, both domestic and international, to explain these increases. These include the high cost of settling claims in Ireland, the general reduction in investment returns, recent court decisions regarding the calculation of compensation losses in personal injury cases and the effects of the 11 September attacks in the United States. The situation has not been helped by the failure of the UK authorised insurer, Independent Insurance Company Limited, who had a significant presence in the Irish market.
An interdepartmental implementation group is progressing the establishment of the personal injuries assessment board. I am confident the establishment of that board will achieve a reduction in the delivery costs of personal injury compensation, thus permitting a reduction in insurance costs to consumers.
The Motor Insurance Advisory Board has been charged with advising us on motor insurance costs and, in particular, with examining the relationship between the incidence of claims and the premiums charged for various classes of policyholder identified by age and sex. The issue of the high cost of insurance for young drivers is especially being examined by the board. I expect to receive the final report of the board in the next month. In light of its recommendations, the Government and I will consider what further action is appropriate and necessary.
A workplace safety group has been established with a view to improving health and safety standards in the workplace. Its objectives are to reduce workplace accidents, to encourage injured workers to return to the workplace at the earliest possible date and to improve claims handling procedures, thus reducing insurance costs. The group is developing proposals at present designed to bring the initiative to small and medium sized firms.
I encourage consumers and insurers to consider ways to reduce the worst effects of the current circumstances, for example, by better management of risks, examination of excess cover and whether the full extent of the cover included in policies is actually required by individuals and companies.