Tony Killeen (Clare, Fianna Fail)

Third party motor insurance is required by law for the use of all mechanically propelled vehicles in a public place. Motor insurance is provided by private companies in an open and competitive market in which consumer interests can exert influence by seeking quotes and comparing costs before purchasing. Insurance companies, numbering 29 at present, are controlled by the Financial Regulator.

I am pleased to note that the Government's insurance reform programme, initiated in 2002, has resulted in cheaper and more widely available motor insurance. In general, the cost of motor insurance has declined by 11% in the last 12 months and overall, motor insurance premia have fallen by 39% since April 2003. Various factors have contributed to this reduction including increased competition in an open market.

Another major reform in this area was the introduction of the Personal Injuries Assessment Board. The PIAB continues to contribute to the lowering of motor insurance premia by eliminating the 46% additional cost associated with processing claims through the courts. Compensation claims are now settled much faster and at no disadvantage to the victim. Similarly, changes in the Civil Liability and Courts Act, which include penalties for giving false or misleading evidence in personal injury cases, have helped to reduce bogus claims.

Substantial progress has been made in the last two years in reducing the number of deaths and collisions. A significant reduction in the number of deaths on our roads took place in 2006 when the second lowest rate in 40 years, that is, 368 deaths was achieved. This downward trend has continued into 2007 with 308 deaths thus far, which constitutes 32 fewer deaths than the comparable figure on this day last year.

The Road Safety Authority has been established and has developed a new road safety strategy for the period 2007 to 2012, in co-operation with all the relevant Departments and agencies, as road safety is a major cross-cutting issue. There has been a substantial investment in new, improved and safer roads. Road safety policy initiatives and safety awareness campaigns have focussed on changing driver behaviour and on drink driving. Legislation has been enacted to enable roadside mandatory alcohol testing, MAT, a ban on the use of hand-held mobile telephones while driving, as well as the private operation of safety cameras to combat speeding. Since the commencement of MAT in July 2006, more than 30,000 drivers have been tested at checkpoints monthly. This testing, aligned with a significant increase in high visibility enforcement, increased penalties and the extension of penalty points has led to a substantial reduction in deaths despite the increased number of vehicles using our roads. Under the Road Traffic Act 2006, the powers of the Garda were also extended to allow the seizure of all uninsured vehicles whether registered within the State or otherwise.

In the case of young drivers, it has been represented that the cost of motor insurance is still too high. As with other types of drivers, the insurance industry assesses the risks involved and sets the premium level accordingly. Unfortunately, because of the high level of collisions and deaths involving young drivers, this group is assessed as being of high risk. This risk cannot be denied or ignored. Figures published recently by the RSA show clearly that young men in particular are consistently over-represented in collisions, fatality and serious injury statistics. There are several factors at play in this regard, including lack of experience leading to speeding and other dangerous practices. The abuse of alcohol and drugs while driving also contributes to the problem. A study of fatal road crashes in 2003 published by the Health Service Executive showed that driver alcohol is, primarily, a male problem with the highest risk group being those aged from 19 to 34. Likewise, young male drivers not wearing seat belts figure very prominently in fatality statistics.

Another reason for high premia is that young drivers are not able to establish a full no-claims bonus until they have been driving for at least five years. When all these issues are taken into account, it is difficult to envisage the insurance industry providing motor insurance cover to young people for the same premium level as for more mature drivers. Nevertheless, the Senator is aware that in the case of young female drivers, the premia are not as high. This difference in treatment is due to the reduced risks involved as perceived by the insurance industry.

Under the social partnership agreement, Towards 2016, the Government gave a commitment to review the cost of motor insurance for young drivers. My Department appointed external consultants in September 2007 to examine this matter. The report, which I expect to receive shortly, should inform us better of the issues involved. I advise both mature and young drivers to shop around and take advantage of the competition within the market when seeking new insurance or renewing an existing policy.