Young drivers profiting insurance industry - Irish Times (24/March/2001) John McManus Insurance companies make bigger profits on drivers under 25 years than almost any other category, according to a Government-backed investigation into insurance costs. The classification of drivers under 25 as a non-profitable risk "is now open to question", according to a report of the Motor Insurance Advisory Board (MIAB), which looked at the books of the largest insurance companies. The report, released under the Freedom of Information Act, reveals that insurers made an average profit of £211 per head on drivers aged 22-24 between 1993 and 1997, compared to £60 for drivers aged 46-55. The report also found that "women appear to contribute more than their fair share in certain instances". Profits made by insurance companies on women drivers over 51 were consistently higher than those on men. The discrepancy in the profits on young women drivers was even greater. "Female policy holders aged 19 to 20 delivered a profit of £730 each compared to £186 for males," said the report. The board found that insurers lose money only on drivers aged 17 and 18, a group which accounts for just 0.3 per cent of all risks. The report's findings challenge the industry assertion that companies lose money when they insure young drivers. The findings also call into question the refusal by some insurance companies even to give quotations to younger drivers and to charge higher premiums to drivers under 30. The document, called "An Executive Summary of Progress Reports", was produced for the MIAB last summer. The report also says insurance companies made profits of 30 per cent on policies sold to drivers aged between 66 and 70. The Department of Enterprise, Trade and Employment, which is represented on the board, described the report as preliminary, as some companies had not given the board access to their books. A final report is due at the end of the year and should cover 90 per cent of the industry, according to the Department. The Irish Insurance Federation was represented on the board and checked the calculations. It found no errors. It threatened to withdraw its cooperation after the report was completed last summer but withdrew the threat when faced with the prospect of a "more rigorous forum for investigation in this area of public concern". Back to Media Index