Paudge Connolly (Cavan-Monaghan, Independent)
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Question 410: To ask the Minister for Transport his proposals to address the issue of young drivers' high insurance premiums; and if he will make a statement on the matter. [2860/06]

Martin Cullen (Waterford, Fianna Fail)
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The Government's insurance reform programme initiated in 2002 has been very successful in bringing down the cost and increasing the availability of motor insurance. Arising from the insurance reform programme, there has been an overall reduction in premia levels for motorists of 26.1% since April 2003. This has been brought about chiefly through the initiative of the Government by improving the functioning of the insurance market decreasing the cost of delivery of compensation and investigating the competitiveness of the market.

Insurance premia have reduced for young drivers, but not as significantly as other categories of drivers. The principal reason the price of motor insurance has decreased less in the case of young drivers is the high incidence of road accidents occurring in this category. Males aged between 17 and 25 are over-represented in fatal and serious injury crashes. Unfortunately, road accident statistics indicate that young drivers are eight times more likely to be killed or seriously injured in a road traffic accident than any other sector of the driving population.

Recent cost surveys carried out by the Financial Regulator show significant differences in quotes between insurance companies and it pays the motorist to shop around. Moreover, first time drivers will initially be unable to build up a no claims bonus record; something which more experienced drivers can achieve. However, after the first year, providing that the necessary conditions are met, the new driver will be able to apply the first year discount to reduce the cost of his or her policy.

Under the Equal Status Acts 2000 to 2004, a person cannot be charged more solely on the basis of age unless the insurer can show that the difference in treatment is reasonable and is justified by reliance on actuarial or statistical data or other underwriting or commercial factors. Insurers base their premia on their experience of claims relating to certain demographics and user types.

EU law prevents governments from intervening with regard to premium levels or in respect of what risks insurance companies are prepared to underwrite. According to the motor insurance industry, the cost of insuring a driver who has yet to pass the driving test is substantially higher than for a driver with a full licence. Consequently I expect that the implementation of the package of measures aimed at a substantial increase in test throughput will over time reduce the cost of insurance for younger drivers. My Department, in consultation with the Department of Finance, is developing a package of measures to deal with the backlog of driving test applications.

There is a personal responsibility on all who drive to drive safely at all times. The National Safety Council concludes that 86% of collisions are caused by human error. If we all take more care, accidents will reduce, as will the cost of motor insurance.