Ireland's largest insurance company Hibernian reaffirmed its yesterday that it would cut motor premiums by 10 per cent later this year for those customers who have no penalty points.
Hibernian managing director Mr Dick O'Driscoll said the company, which supplies motor insurance to more than a quarter of the market, was showing its commitment to the concept of the penalty points system, despite the rise in the numbers killed and injured on Irish roads in the past two months.
But he said the Government needed to do more. "If we are ever to see real and long-lasting changes in the insurance market in Ireland, we need to ensure stringent enforcement of Government legislation."
He told the Oireachtas Joint Committee on Enterprise and Small Business that Ireland was an unsafe country in which to work or to drive, according to the State's largest insurer.
The committee, which is examining reform of the Irish insurance market, also heard from the Irish Insurance Federation. Chief executive Mr Michael Kemp denied recent reports that the industry was rowing back on commitments to pass on lower benefits as a result of the penalty points system.
Responding to Fine Gael's Mr Phil Hogan, who said motorists would be angry at any reneging on the issue, Mr Kemp said there was no plan to do so. "We are just stressing again the need for sustained enforcement," he said.
The chairman of the committee, Fianna Fáil's Mr Donie Cassidy, said the industry would have to reward the endeavour of both the Government and drivers, as several committee members questioned the record of the insurance industry in passing on the gain of previous reforms.
Senator Terry Leyden (Fianna Fáil) also issued a broadside to the legal profession, saying it too would have to be liable for fraudulent insurance claims, which serve to raise the cost to all customers.
Mr O'Driscoll told the committee that Ireland compared poorly with international experience. "As long as statistics like these prevail in Ireland, it is almost inevitable that we will end up paying higher insurance premiums than our neighbours in Europe," he said.
Along with the IIF and Quinn Direct, which also appeared before the committee, he said there was no chance of fundamentally reducing the cost of insurance in Ireland until measures were put in place to cut the number of claims and, more importantly, cut the cost of claims. "Reduced costs will lead to reduced premiums," was the message from Mr O'Driscoll.
Addressing the committee earlier, Mr Kevin Lunney, financial services director of Quinn Direct, said the awards level in Ireland remained very high, creating a huge differential with other markets. He gave the example of the award given in one case for a "simple arm fracture" in the Irish courts of €15,000. This compared with around €5,000 in Northern Ireland and €2,500 in England.
Speaking later at the launch of a report by Tillinghast-Towers Perrin for Hibernian on the comparative costs of insurance in Irish and international markets, Mr O'Driscoll said that, in the UK, personal injury accounted for just 25 per cent of awards granted; in Ireland, the figure was closer to 75 per cent.
"Given that the payouts for catastrophic injuries are roughly the same in Ireland and Britain, if not higher in Britain, the figures indicate that awards granted for more minor injury in Ireland are hugely out of line with the experience in Britain.
The three industry witnesses called for tougher action on uninsured drivers who, it was said, add between €70 and €100 to the cost of every motor premium.
