2001 Insurance Annual Report

Ms. Mary Harney, T.D., Tánaiste and Minister for Enterprise, Trade & Employment, today (Monday 30^th December 2002) announced the publication of the Insurance Annual Report - "The Blue Book" - for 2001. The principal features of the Report are as follows :-

Volume of Business

Total gross premium income received by head offices and branches in Ireland amounted to €18.93 billion in 2001, a 7% increase on 2000. Of the total, IR£13.6 billion (72%) was generated by life companies and €5.33 billion (28%) by non-life companies.

Non-Life Underwriting Results

• Total Irish risk business increased by 22% on the 2000 level to €2.81 billion, while foreign risk increased by 14% to €1.9 billion
• The net underwriting result for Irish risk business improved on the 2000 result with a loss of €390 million compared to a loss of €453 million in 2000. Allowing for investment income, the loss for 2001 was €73 million compared to a loss of €161 million in 2000.
• Net underwriting losses for motor insurance amounted to €186 million (11% of net premium) compared to a loss of €323 million (24% of net premium) in 2000.
• Underwriting losses on Liability insurance increased from €133 million (39% of net premium) in 2000 to €165 million (35% of net premium) in 2001.
• In Fire and Property insurance, underwriting losses increased from €25 million (5% of net premium) in 2000 to €67 million (11%) in 2001.

Life Assurance Results

Total new premiums written in Ireland showed an increase of 2% over 2000 rising from €10.96 billion to €11.2 billion, of which €8.1 billion related to Irish business compared with €7.93 billion in 2000. New single premium business written in Ireland remained the same as in 2000, while new annual premium business increased by 39% in the same period.

Total gross premium income in 2001 increased by 3% from €13.24 billion to €13.6 billion. Of this, income in respect of Irish business amounted to €8.1 billion (€7.93 billion in 2000).

Due to the continued policy of stringent and prudential supervision of all companies no failures occurred this year.

Transfer to IFSRA

Responsibility for the authorisation and supervision of insurance undertakings will transfer from the Department of Enterprise, Trade and Employment to the new Irish Financial Services Regulatory Authority (IFSRA) in 2003.

The Tanaiste's Reform Programme

On 25 October 2002, the Tánaiste announced a programme of fundamental reform. The programme reflects the commitments given in the Agreed Programme for Government in June 2002. It comprises a comprehensive set of inter-related measures designed to improve the functioning of the Irish insurance market.

The key measures contained in the reform programme include:

An Action Plan to give effect to the implementation of the 67 recommendations in the report of the Motor Insurance Advisory Board (MIAB), within a target timeframe. The plan will be overseen by a Ministerial Committee, chaired by the Tánaiste and will report regularly to Government on its progress.

Establishment of the Personal Injuries Assessment Board (PIAB) on an interim basis, pending preparation of the necessary legislation to put the PIAB on a statutory footing

Undertaking a study on competition in the insurance sector, in conjunction with the Competition Authority.

The substantive recommendations in the MIAB report are not limited to motor insurance but, rather, address employers' and public liability insurance as well. They cover the areas of responsibility of various Government Departments and other bodies, and are aimed at improving Court procedures, road safety, provision of information to consumers, etc. The MIAB Action Plan specifies, in respect of each recommendation, what has to be done, when and by whom, and the potential impact of implementation on premium costs as estimated by the Irish Insurance Federation (IIF).

Revision of Blue Book format

The Tánaiste has announced that the current format of the Blue Book will be revised, in keeping with the MIAB recommendations, to make the document more user-friendly for the general consumer. At present the Blue Book is primarily used as an Industry resource.

Availability of the Insurance Annual Report

The Report will be available shortly from the Government Publications Sales Office (Price €8.89). It is available on the Department's website (http://www.djei.ie/commerce/insurance/index.htm).