Insurers to discuss claims of 'creaming young drivers' - Irish Independent (28/March/2001) Senan Molony THE Irish Insurance Federation is to meet today to discuss the leaking of a report revealing that insurance companies have been making large profits by charging huge premiums to drivers aged 18-25. Fine Gael frontbencher Charles Flanagan will tell the IIF that the insurers have been "living a lie" for years by pretending that high premiums for young drivers are justified because this sector of the market is massively unprofitable. An interim report to the Government on the insurance industry exposes however that insurance companies have been "creaming off excessive profits from young drivers in their 20.". The report shows that the profitability of insuring drivers in the 18-25 category is two and a half times that of insuring drivers in their 40s. The insurance companies claim however that they suffer inordinate losses in the category up to age 18, and are also disputing the level of profitability reported to the Government in the 18-25 sector. But Fine Gael spokesperson Charlie Flanagan said last night: "The category up to age eighteen is very narrow - and the reason the figures are disputed in the 18-25 category is that the insurance companies have failed to provide the full data after seeing the interim findings." Taoiseach Bertie Ahern joined the widening row yesterday, saying the Government shared concerns about the level and cost of insurance for young drivers. "It has for years been excessively high and still is excessively high," he said. Mr Ahern was reacting to Fine Gael leader Michael Noonan, who cited the case of a young driver whose premium jumped from £2,300 a year for basic insurance to £2,700pa despite never having had an accident. The Taoiseach said: "I have to say that in relation to the figures before the Government in the category referred to, the industry is not making any profits and has not been for some years." The figures for the 18-25 slice of the market were "in dispute" he said. They had not been agreed "for the last six or eight months" since the interim report was made to the Government last July, he indicated. He said the cost to insurance companies of claims for personal injuries had been "enormous," adding "that is why we have set up the personal injuries compensation board. It is in the area of personal injuries that this dilemma comes from." There were firm figures from the industry about their profit and losses in these areas and they were in the public domain, Mr Ahern claimed. The Motor Insurance Advisory Board (MIAB) which made the preliminary report to the Government was intended to help bring down costs. The Competition Authority was asked last night to carry out an immediate investigation of what Fine Gael said was the "wholesale rip-off of young drivers." The Chairman of the Authority, Mr John Fingleton, is unavailable at present but expected to meet Mr Flanagan on the issue. Mr Flanagan said the MIAB report showed the only loss-making group to be the under-18s. The refusal of some insurance companies to quote for some drivers or to quote astronomical sums was a separate scandal, he added. Figures already show that Irish motor insurance premiums are running at five times higher than levels charged ion the rest of the EU. "The State should have a role in regulating the market in the same way as it regulates the medical insurance market," he added. Back to Media Index