Gary Owens believes other insurers will come around to his view thatpenalty point data can facilitate cheaper insurance. Siobhán Creaton reports.
Gary Owens is not the most popular man in the insurance industry at the moment. The 44-year-old managing director of Hibernian's general motor operations has broken ranks with his peers by capitulating to the Minister for Transport's demands to use the penalty points system to facilitate cheaper car insurance. In recent days, his rivals have attacked the move as a publicity stunt, but Mr Owens believes they are being short-sighted and that they will ultimately be forced to strike a deal with Mr Brennan.
Hibernian is one of the biggest motor insurers in the State, with roughly one in three drivers on its books. Over the coming months, Mr Owens and his staff will gain exclusive access to the National Driver File and have pledged to use this information to reduce the cost of insurance for safe drivers by 10 per cent and to force the speed merchants and other miscreants to pay higher premiums.
"We wanted an industry solution and made that very clear to the Irish Insurance Federation \ and the Department. We would prefer the industry to support what we think is a serious drive to reduce accidents. When it became clear that there wasn't any appetite for an industry solution we decided that we would do our own thing. As a market leader we would have to drive the market if we feel that that is the right thing to do."
Mr Owens says the IIF's position not to co-operate with the Minister was just a reflection of the industry's view, which he believes is ultimately flawed. "I was particularly disappointed with the comment around that we were doing this for a publicity stunt. This is a very short-term view. If at the end of the day this doesn't work out, we could genuinely go back to the Minister and say that there is no correlation between penalty points and our claims, although I have to believe there has to be."
Getting a look at the National Driver File will allow Hibernian to quickly weed out those who openly flout the traffic laws. "Over time we will be building up our intelligence and begin to see why people are getting penalty points. This information will become another ratings factor just like your age, your experience, the type of car that you are driving. I can't believe that penalty points can't be a significant rating factor."
In the UK the introduction of the penalty points system initially reduced the cost of motor insurance significantly. It did creep back up again but today it remains below where it was. Mr Owens believes that the price of car insurance will be tested over the next 12 months as the penalty points system takes effect. "We will be in a position to give a reduction in premiums to the people who deserve it."
The Minister was seeking a guarantee that motor premiums could fall by as much as 15 per cent for penalty point-free drivers but was forced to settle for 10 per cent. Mr Owens says that 15 per cent was always a tall order. "That size of a reduction is off the mark at this stage because most of the accidents that occur are for males under 25 years of age, while 62 per cent of road fatalities were for males under 25. Since penalty points have come in, we have seen a bigger change in behaviour for young male drivers in particular and rates are already coming down because of that frequency change."
Mr Owens points out that mature drivers were causing very few of the accidents in the first place and so there was little scope for cuts in motor insurance costs anyway. He points to the dearth of information currently available to insurance companies. In 2002, he says some 350,000 speeding offences were recorded and 12,000 drink driving convictions, yet none of these was notified to Hibernian.
"If we don't get access to this information, the whole thing falls on its face. I think this is another reason why the industry should get on board. Otherwise they will be at a competitive disadvantage because we will know who had no penalty points and will be able to rate accordingly."
Mr Owens feels that by adopting its stance it is making a hugely supportive gesture towards reducing the carnage on Irish roads but stresses that it is the Government that has the greatest influence to this end. "In the UK, fatalities are 50 per cent lower than in the Republic, which is down to three factors: better roads, better enforcement and insurance companies have access to penalty points data."
Mr Owens says that there are virtually no fatalities or serious injuries on Ireland's motorways; rather it is cars overtaking on secondary roads that cause most accidents. But he believes that better enforcement of the traffic laws is the most fundamental factor in improving road safety.
The rise in road deaths in May is a concern and if this continues in the coming months, Mr Owens admits it may have to review its position on the scale of discounts that can be offered, but is optimistic this will not materialise.
"The extension of the penalty points system and the National Roads Authority campaign will make a significant difference between now and November. The fact that we are pushing it will make a difference, if only a slight difference. I think the Minister for Justice is also going to push it."
The establishment of Personal Injury Assessment Board next year should also help to shrink the costs involved in processing claims, particularly the legal costs. At the same time, weak stock markets have substantially shrunk the assets of insurance companies, maintaining the pressure to keep premiums at a high level, so consumers should not expect insurance costs to quickly fall.
"People don't like paying for insurance so no matter what we do it's a grudge spend. All we can try and do is ensure that the level of premiums that they are paying is equal to the risk we are taking. High insurance premiums are not in our own interest. It leads to a huge amount of under-insurance, fraud and a huge public relations agenda, so the perception that we want premiums to stay high is wrong."
