(2004/C 84 E/0067)

WRITTEN QUESTION E-3387/03

by Armando Cossutta (GUE/NGL) to the Commission

(17 November 2003)

Subject:   Increases in the cost of motor insurance — data sources

With reference to my written question to the Commission (E-l522/03 (1)) tabled on 23 April 2003, and to the answer by Commissioner Bolkestein received on 15 July 2003, I would like to reassert the reliability of the data I provided on the increases in the cost of motor insurance cover in Italy.

In the answer on behalf of the Commission, Commissioner Bolkestein contests the data I presented, which among other things indicate the disproportionate increase in the cost of motor insurance cover over the last 12 months, and in doing so refers to different figures. In the same answer, the Commission cites the source of its reference data as the European Insurance Association (CEA). This is in fact the body which ‘represents the interests of private European insurers’ (as it officially describes itself), and is therefore a completely partisan organisation. I would also point out that the data I cited came directly from the Italian competition ombudsman's office, which is an impartial organisation.

Answer given by Mr Bolkestein on behalf of the Commission

(29 January 2004)

The Commission is aware of the concerns regarding the situation existing in Italy where motor insurance tariffs have increased very much in recent times.

The Honourable Member is right in pointing out that the data provided by the Italian Competition Authority (Autorità Garante della concorrenza e del mercato), which coincide with those elaborated by Eurostat, show a larger increase in the premiums for Italy than the data issued by the European Insurance Association (CEA). The data from Eurostat show an overall increase in motor insurance premiums by 135,3 % from January 1995 to October 2003 in Italy — compared to an Union average of 29,3 %. However, it must be noted that other Member States also experienced large increases during the same period, notably Ireland (increase by 59,3 %) and the United Kingdom (84,5 % since January 1996).

However, one needs to underline that such a cross-country data comparison is not easy or straightforward. In particular, as also explained in the survey conducted by the Italian Competition Authority, reliable comparative results across Member States are very difficult to obtain since the features of the data considered differ from one Member State to the other due to local characteristics (such as different types of cars, different coverage provided by the insurance policies, etc.). Furthermore, the surveys conducted by the Italian Competition Authority (as well as by other public or private institutions, such as the European Insurance Association, CEA, that represents the European insurance industry) are based on samples that may differ with regard to the age of the drivers or the sex of the insured persons (for example the statistics of the Italian Competition Authority take only account of males). In addition, other cost factors, such as differing costs to repair vehicles and varying compensation schemes across countries, may affect the comparability of the statistics.

Finally, in order to assess the increase in premiums in Italy, it must also be taken into account that motor insurance tariffs were fixed by the Italian Government before the liberalisation introduced by the European directives in 1994. According to information available to the Commission, even after the tariff liberalisation, claims costs plus expenses have exceeded premium income for many years in the accounts of insurance undertakings in Italy. This is also confirmed in the analysis conducted by the Italian Competition Authority, which points out that only in the year 2000 did the premiums arising from motor insurance exceed the cost of claims. In 2000 and 2001 the motor insurance income still appears to be negative for insurance undertakings due notably to high management expenses.

However, the Italian Competition Authority's analysis also highlights conditions of low competition in the Italian market due to the existence of agreements between insurers as well as between insurance undertakings and loss adjusters for the claim compensation. In this specific regard, the Commission would like to specify that, on its part, it does not dispose of indications concerning possible anticompetitive agreements or collusion between insurers in the Italian market that would be contrary to European competition law (Article 81 of the EC Treaty).

The Authority's analysis in addition shows that other factors external to the insurance undertaking contributed to thetariff increases and their high level, such as the high costs of the compensation granted for personal damages and the uncertainty of the criteria determining such compensation in Italy.

Only in 2002 did most insurance companies reach a situation where motor insurance premiums income exceeded cost of claims plus expenses. In 2003 tariffs have apparently started to decrease for some categories of drivers, as confirmed by the data from the Italian Authority for the Supervision of the insurance sector (ISVAP).

In the conclusions of the ISVAP report in 2002 it is stated, with regard to the survey of the Italian Competition Authority, that the Italian system is not entirely comparable with the one existing in countries like France or the United Kingdom. These Member States have had freedom of tariffs for many years and, unlike in Italy, there was no obligation for insurance undertakings to provide coverage to all policyholders.

In addition to the above considerations, the Honourable Member is invited to consider also the relatively high cost and frequency of accidents in Italy as pointed out by the Commission in its reply to the question E-1522/03.

According to the European insurance legislation the tariffs of motor insurance should be determined by market forces. The Commission believes that, in the future, a more competitive and efficient European insurance market will lead to more competitive tariffs for the benefit of consumers in the Union.

(1)  OJ C 33 E, 6.2.2004, p. 128.