Irish motor insurers’ are ten times more profitable than their UK counterparts, a report by the the Motor Insurance Advisory Board (MIAB) shows.
Irish motor insurers’ profits between 1983 and 1999 were €434 million (IR£342 million) compared to UK insurers who made a profit of Stg£30 million.
The MIAB’s extensive report on the industry also shows that young drivers are paying more than their fair share in motor insurance charges.
Speaking at the launch of the MIAB’s extensive report on the industry, based on the current level of accidents and charges, chairperson Ms Dorothea Dowling criticised insurers for setting charges at a level that aims to keep young people off the road.
"If young people follow the laws of this country in relation to driving tests, rules of the road etc, then they should be rated like everybody else . . . They should not be discriminated on," said Ms Dowling, adding it was against the law to do so.
The MIAB report showed charges for young female drivers were not justified by their claims costs. It said young females were considered by insurers as "subsidisers".
The 750-page report also expressed concern about the charges for senior drivers and those managing disabilities which are also set at rates out of proportion the overall cost to insure.
The motor insurance industry was criticised as uncompetitive. The industry is now controlled by a five companies down from 17 motor insurers in 1993.
This situation is compounded by the fact that motor insurance in compulsory in Ireland and consumers are often not aware of the difference between various "product images", said the Minister of State at the Department of Public Enterprise Mr Noel Treacy at the launch.
"Vested interests and inefficiencies may collectively account for as much as half the premium paid by the law-abiding motorist," Mr Treacy said.
Ms Dowling said the two crucial factors that could lead to the reduction of insurance charges overall would be stopping the Courts and Court Officers Act, which is yet to be formally ratified, and to set up an alternative system for the straight forward assessment of each case.
The courts Bill will allow the Circuit Court to award up to €100,000, rather than the existing £30,000 limit, while the District Court's limit will rise from £5,000 to €15,000.
Stopping the Bill is vital to limit further inflation in the costs of awards, Ms Dowling said.
Mr Tracey said he had recommended to the Government that changes are made to the Bill and hoped this would happen.
The Minister also said he is awaiting a report into setting up the Personal Injuries Assessment Board, announced by the Government earlier this year, and that he should deal with the matter "over the next month".
An Implementation Group is to report to the Minister in three months with an "action plan" for implementing the recommendations in today’s report. The group will include representatives from Government departments as well as Consumers Association of Ireland; IBEC and Ms Dowling.
To help drivers to "shop around" for insurance, the Minister also pledged to introduce regulations forcing insurers to give 15 days notice of renewal policy renewal terms along with an official certificate of no claims bonus showing the drivers record of "accident free driving".
The report is also to be sent to the Competition Authority and the Equality Authority so that they can act on its findings. The Irish Insurance Federation has also been asked to give their immediate response to ten of the 67 recommendations in the report.