Dáil Éireann Debate, Tuesday - 28 February 2017
66. Deputy Richard Boyd Barrett asked the Minister for Finance his plans to deal with discriminatory practices by motor insurance companies against particular categories of drivers in terms of the setting of premiums; and if he will make a statement on the matter. [10036/17]
Amharc ar fhreagra71. Deputy Richard Boyd Barrett asked the Minister for Finance his plans to deal with discriminatory practices by motor insurance companies against young persons, elderly persons, taxi drivers and those with older cars in terms of the setting of premiums; and if he will make a statement on the matter. [10037/17]
Amharc ar fhreagraI propose to take Questions Nos. 66 and 71 together.
It is important to note that neither I nor the Central Bank of Ireland can direct insurers to provide cover to a particular category of drivers at a particular price as this is a matter of a commercial nature and would be contrary to EU rules.
In providing motor insurance, insurers adopt a risk based approach to determining premiums. In simple terms, they look at an application and make a determination of what the likelihood of a claim is and price accordingly. Their previous claims history will heavily influence their decisions in this area. Consequently, if a company has had a significant level of claims from a particular age group, then this will be reflected in how they price such a group of people in the future.
Amongst the risk factors insurers look at are the age of the driver, the age of the car and how the car is used, as well as the location of risk, driving history, vehicle details (e.g. engine size), medical conditions, etc. Using these factors, some people will be priced at higher levels because they are considered to represent higher risks. I do not believe that this can be described as a discriminatory practice as it simply reflects the nature of how insurance operates.
In relation to taxi drivers, for instance, their time spent on the road makes them a much higher risk for an insurance company compared with a person who drives a short distance to work every day. This higher risk is also likely to be reflected in an insurer's claims experience, though obviously this will differ from company to company.
However, I do accept that it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the cost of insurance. Consequently, I established the Cost of Insurance Working Group. Its Report was approved by Cabinet on January 10 2017, and subsequently published. It contains 33 recommendations and 71 actions which are detailed in an action plan contained in the Report with agreed timelines for implementation. Work on implementing these recommendations is under way.
While there is no single simple solution to effect a reduction in the cost of insurance, when taken cumulatively, the implementation of these actions can deliver fairer premiums for consumers including young persons, older persons, taxi drivers and those driving older vehicles without unnecessary delay.
