The Government alone has the power to change the motor insurance environment, the Automobile Association of Ireland said today.
The Government must give a clear commitment to act otherwise today’s report by the Motor Insurance Advisory Board (MIAB) will be nothing more than another dust gatherer, Mr Conor Faughnan of AA Ireland said.
The report found Irish motor insurers’ were ten times more profitable than their UK counterparts.
The Irish Insurance Federation (IIF), meanwhile, said comparisons with the UK insurance market are misleading, and that there is a collective responsibility for the high insurance costs facing Irish drivers.
The IIF rejected the criticism saying there is a co-responsibility for the current situation which includes the Government and legal profession.
It is not inaction but powerlessness that has prevented the insurers from acting, said Mr Martin Long of the IIF which is a trade association for insurance companies.
While welcoming the MIAB report and pledging to do its best implement the 67 recommendations, the IIF called on the Government, the legal profession, road safety bodies and other relevant parties to do likewise. Otherwise it warned the cost of motor insurance will not come down.
Mr Faughnan of AA desribed the report as "brilliant in unarguable detail". He said: "In substance the principles and analysis are in essence that which was already known and understood for a long time. The Government no longer has the excuse that it does not understand the problem."
He called for the urgent establishment of a dedicated Garda traffic core and the penalty points system already promised to tackle road safety.
A collage of interests are responsible for the high costs now facing Irish motorists including insurance and legal industry, according to Mr Faughnan.
The legal industry is literately hovering money out of the system, he said.
The Personal Injuries Assessment Board promised earlier this year is needed now. The Minister of State at the Department of Public Enterprise Mr Treacy, today said he expects to do so within the next month.
"Also the motor insurance industry has collectively been complacent, allowing costs to escalate knowing it can be passed on to the consumer. It would be different if insurance was not compulsory," he said.
IIF’s Mr Martin Long also said claims that Irish motor insurers’ are ten times more profitable than their UK counterparts is taken out of context and does not account for the poor insurance market in Ireland and in the UK.
The Irish motor insurance industry had a 4.6 per cent return over the last 17 years, and the Irish market has deteriorated 1999, so that it made an absolute loss of €165 million (IR£130 million) in 2000, he said.
The MIAB report showed that Irish motor insurers’ profits between 1983 and 1999 were €434 million (IR£342 million) compared to UK insurers who made a profit of Stg£30 million.
Mr Long also said the Irish and the UK markets are different and that to draw parallels was "like comparing apples and oranges".
The Government was also criticised today by the Motor Insurance Justice Action Group (MIJAG), for the unwillingness it has shown "to tackle the huge and well organised vested interested involved".
It claimed even if all the 67 recommendations are implemented in full there is no guarantee that young drivers’ insurance costs would be reduced.