16 April 2002: It took three years to officially quantify what we all knew in our guts. The cost of motor insurance in Ireland is now truly seen as just another in the great rip-offs suffered by Irish motorists.

The Motor Insurance Advisory Board report released yesterday found that up to 50% of the cost of insurance is directly attributed to the insurers themselves and the legal profession.

And with 40% of every compensation payout going into lawyers’ pockets, there is a massive vested interest in keeping the situation here as it is.

With premiums four times higher than in the UK, insurers made almost nine times the profits of counterpart insurers in the UK during much of the nineties.

And when the insurers challenged the validity of the conclusions in the report, MIAB chairwoman Dorothea Dowling didn’t even bother to argue with their smooth-talking representative. “Our brief was to get the facts. These ARE the facts,” she said bluntly.

The insurance industry is guilty of not fighting thousands of ‘questionable’ claims because of the high legal fees it might have to pay.

The MIAB report also shows up the fact that young people ARE being overcharged for insurance, particularly women and young men with full licences.

The depressing things is that the report authors don’t see much change happening even in the light of their conclusions, because ‘the current situation suits too many interests’.

The Government’s reaction was to order the Competition Authority and the Equality Authority to ‘take any necessary action’. It has also set up an ‘implementation body’ to report back in three months on how to deal with 67 recommendations for change in the industry.

Fine Gael TD Charlie Flanagan says the long-overdue report doesn’t need another expert group to produce ‘a report on a report’. He said ACTION is needed, and needed NOW. His colleague Denis Naughten criticised proposals to improve the lot of young drivers, saying they’ll take another three years before there’s any real action.

Macra na Feirme and the National Youth Council says the report demonstrates that ‘excessive profiteering, ballooning management expenses and lack of competition and consumer protection’ are the primary reasons for exorbitant insurance costs here, and that the issue is too costly for thousands of young to be delayed by further consultation or analysis.

Both organisations want the introduction of a tax relief on insurance premiums in excess of 1,000 euros, for individuals driving private vehicles who have a clean driving record; an action plan and timetable for implementation of the recommendations of the report; the immediate establishment of the Personal Injuries Assessment Board for those involved in motor vehicle accidents; and the immediate appointment of statutory financial regulator to ensure fairness in the insurance industry.

The Motor Insurance Justice Action Group MIJAG welcomed the publication of the report and congratulated the MIAB Committee for its good work.

"It is official now that Ireland has a very expensive, inefficient and profitable motor Insurance Industry that is in need of radical surgery," MIJAG spokesman Mick Murphy said. "Unfortunately if every one of the 67 recommendations in the report were implemented there is no guarantee that young drivers paying 3,000/4,000/5,000 euros for insurance would pay less. In that sense the report does not go nearly far enough."

©2002irishcar.com