Motor premiums paid by young male drivers generated the highest surpluses per policy for insurance companies in 2002, new figures from the Irish Financial Services Regulatory Authority indicate.
Male provisional licence holders aged 17-20 years yielded an average a surplus of over €3,000 after claims costs by the end of the year. The average surplus for third-party, fire and theft cover for these drivers was almost €2,200.
The average surplus for all drivers at the end of 2002 was €560 per policy for comprehensive cover and €757 per policy for third-party, fire and theft cover - up from €428 for comprehensive cover and €507 for third-party, fire and theft cover in 2001.
This figures indicate that surpluses increased by 31 per cent for comprehensive policies and 49 per cent for third-party, fire and theft cover in 2002, the year in which motorists were hit with the highest increases in their premiums, despite a falling frequency in road collisions.
Only 40 per cent of comprehensive claims and 22 per cent of third-party, fire and theft claims relating to accidents that occurred in 2002 were settled by the end of the year. Insurers estimate it takes five years for most of a year's claims to be settled.
The data published by the financial regulator yesterday also examines the five-year period from 1998 to 2002, inclusive. At the end of that period, insurers had recorded large deficits in the comprehensive category for both male and female provisional licence holders aged 17-20 and male provisional licence holders over the age of 70.
The market segment that generated the highest surplus over the period was females aged 17-20 with full licences.
The surplus figures are not a measure of profitability in the industry as they do not take into account additional claims-related costs such as distribution costs, commissions to brokers, reinsurance costs and the cost of claims against uninsured motorists.
The financial regulator's analysis of motor premium and claims costs by driver profile is the first of its kind. Gathering the statistics was one of the recommendations made by the Motor Insurance Advisory Board (MIAB) in 2002.
The aim is to examine the level of claims and their impact on the premiums paid by different categories of drivers and to encourage competition in the market by bringing transparency to the marketplace.
The regulator said yesterday that it would publish the 2003 statistics in mid-2006 and the 2004 figures by the end of 2006.
The Irish Insurance Federation (IIF) said the report covered a period when premiums had escalated because the market was either barely profitable or unprofitable for insurers.
"This report talks about a period that was very bad for consumers, when the amount of choice was nowhere near what it is now and insurers were exiting segments of the market that they found to be unprofitable," said Michael Horan, the IIF's manager for non-life insurance.
