Harney insists reforms will open up insurance market to competition
But she criticised the country’s insurers for failing to reduce their premiums quickly enough.
Ms Harney disclosed that she was planning to meet a number of firms in Europe and America to ensure they knew the Irish insurance industry was undergoing major reforms.
A competitive insurance market was essential for a competitive economy, she told the Insurance Institute of Ireland’s annual national conference yesterday.
“Although I acknowledge that costs are reducing, that premiums are reducing, I have to say far too slowly as far as I’m concerned.
“I think competition, together with the reforms we have put in place, is what will drive down costs for the insured.”
However, insurance institute’s president John O’Neill said that, until the industry returned to profitability, insurers would not be attracted to Ireland.
“There’s no way the Government can coax other insurers to come in while there’s still a high risk of losses,” he said.
The industry, he said, recognised the Government’s efforts, including improvements in road safety and plans to crack down on fraudulent claims.
“It’s important to put on the record that every company has reduced private motor premiums in the last year by upwards of 5%.
“But the problems continue to lie in the area of liability and, while motor insurers experienced a first profit in five years, there are no signs that the losses of 56m through general liability will be reduced in 2003.” Mr O’Neill said the speedy introduction of a Person Injuries Assessment Board (PIAB) and laws to reform personal injury actions were important.
He said the benefits to the consumer and to the insurers will not be realised until all the recommendations of the Motor Insurance Advisory Board and the legislation attached to the PIAB have been completed.
However, the Tánaiste is proceeding with her plan to meet companies that might wish to enter the Irish market.
“I have set out a schedule of appointments over the next number of months where I intend to visit a number of key companies that I believe could have a useful role to play here” she said.
She said that measures being undertaken to reform the industry would attract other insurers.
The reforms included the establishment of a personal injuries board and the drafting of legislation to set it up on a statutory basis in a bid to eliminate fraud and lower the cost of dealing with claims.
She said the introduction of the country’s penalty points system would also help reduce claims for accidents.
Ms Harney added: “I want to see a strong, vibrant and successful insurance industry in this country.
“I want to see an industry that is strong and profitable but I also want to see an industry that supplies insurance products to the market at an affordable price that is competitive relative to other European countries.
“The Government’s reform programme will make the Irish insurance market a better place in which to do business.”
