Written answers

Tuesday, 16 November 2004

Department of Enterprise, Trade and Employment

Insurance Industry

9:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 194: To ask the Minister for Enterprise, Trade and Employment if insurance costs here remain a deterrent to investment; and if he will make a statement on the matter. [28609/04]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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According to the National Competitiveness Council's statement on prices and costs, Ireland's expenditure on life insurance ranked fifth highest out of 16 countries, behind Switzerland, the US, the Netherlands and the UK.

There has been an improvement in the functioning of the Irish insurance market. The Irish Insurance Federation recently revealed that the 20 non-life insurance companies operating in the Irish market made a combined operating profit of €747 million in 2003. While insurance profitability has led to reductions in premia, it also enhances the attractiveness of the market to prospective new entrants.

The Government's determined action in introducing reform in the insurance sector is evident through the establishment of the Motor Insurance Advisory Board, MIAB, and in June of this year the establishment of the Personal Injuries Assessment Board, PIAB. The PIAB provides independent assessment of personal injury compensation without the need for most of the current litigation costs, thereby reducing the costs significantly. These insurance reforms have already led to cost savings this year for some businesses. According to the Central Statistics Office, motor insurance has decreased by 15% in the past 12 months. These cost reductions have improved Ireland's cost competitiveness, thereby enhancing our attractiveness as a location for investment.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 195: To ask the Minister for Enterprise, Trade and Employment the extent to which public liability or other insurance costs here compare with other European countries, trading partners or competitors; and if he will make a statement on the matter. [28610/04]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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A comparison of insurance figures in European countries is available in European Insurance in Figures — June 2003, published by the Comité Européen Des Assurances, CEA. This report contains details on "Average non-life premium per inhabitant" and the figures include motor and public liability insurance.

Figures for 2001 show that, of 29 European countries listed, Ireland ranked fourth highest with a value of €1,123. Luxembourg was highest, with a value of €2,084, Switzerland was second highest, with a value of €1,642, and the Netherlands was third, with a value of €1,125. The United Kingdom, with a value of €1,072, was fifth highest. Estonia was second lowest, with a value of €67, and Turkey was lowest, with a value of €23. The average premium in Europe in 2001 was €581.

The ratios need to be analysed carefully. The figures comparing premium amounts to the number of inhabitants do not correspond to sums actually paid by insured persons and, in addition, they do not always include only or all premiums paid by the inhabitants of the country concerned.

These 2001 comparisons do not reflect recent experience in Ireland as a result of the Government's insurance reform programme. Indications to date are that the cost of insurance in Ireland is falling. The CSO publishes monthly indices of costs for a number of classes of insurance. These statistics show that there was a reduction of 19.3% in motorcar insurance between the months of April 2003 and September 2004. This is the latest figure available. There are also reported reductions in the cost of premia for public and employer liability insurance.

My Department no longer regulates insurance companies. This responsibility has passed to the Irish Financial Services Regulatory Authority, IFSRA, under the aegis of my colleague the Minister for Finance. IFSRA has conducted a number of cost surveys on motor insurance and, I understand, proposes to undertake cost surveys for public liability and employer liability.

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