Safer roads lower insurance costs by 18%

MOTORISTS are reaping the rewards of dramatically lower insurance premiums as accident and death rates on Irish roads tumble, figures show.

Policy prices have also fallen due to the Government’s Personal Injuries Assessment Board (PIAB) work to cut the costs of handling insurance claims.

In 1997, Ireland’s roads saw 18.7 accidents per 100 insured drivers yet, by 2005, the rate had dropped to 11.7 and has continued to fall.

A decade ago, drivers with comprehensive insurance paid on average €623, and in 2005 motorists paid €665, a rise of €42.

Yet, when steep wages rises and low increases in inflation are taken into account, the cost of policies has fallen in real terms.

The 1997 sum is worth €896 in today’s money while the 2005 amount is equal to €733, meaning policies have fallen €163 or 18.2% in eight years.

The figures for 2005 were published yesterday as part of the annual review of motor insurance policies by the Government’s Financial Regulator.

Statistics in the report back the Road Safety Authority’s argument about how safety measures on Ireland’s roads are helping to bring down accident rates and deaths.

Garda figures show 472 people died on the roads in 1997 while a further 13,115 were injured, making a total casualty toll of 13,587.

By 2002, the death toll had dropped to 376 and the numbers of injured had fallen to 9,206, making a total of 9,582.

Although garda figures do not include the numbers of people injured after 2002, the death rates correspondent with the insurance industry’s accident figures showing a small rise in 2004 and 2005.

Between 1997 and 2005, insurers have been able to pass on savings from fewer accidents but the blip in 2004 and 2005 was offset by savings made through the PIAB.

Last year, and so far this year, death rates on the roads have continued to fall, raising the possibility that insurance premiums could drop next year.

The Financial Regulator’s consumer specialist Mary O’Dea said the PIAB was also speeding up claims, benefiting consumers as well as insurers.

The figures also show what the industry earns once insurers have collected in premiums and then paid out claims.

In 2005, the average surplus per policy was €346 for comprehensive cover and €515 per policy for third party fire and theft cover.

Despite the sums, the amounts of such surpluses are declining as insurers battle for business among Ireland’s growing number of motorists.

www.financialregulator.ie