The Department of Justice, Equality and Law Reform is putting a package of measures together to tackle the rising cost of insurance.
The Minister for Justice said yesterday that the measures would "transform" the insurance industry and its negative impact on enterprise and job creation.
Mr McDowell told a meeting of Dundalk Chamber of Commerce there were "vested interests" who wanted to keep things as they were.
Government progress in reducing tax on employment and enterprise was being replaced by "a different imposition, the insurance wedge.
"People cannot now put together packages of enterprise or job creation without paying a huge levy to the insurance industry".
The Government saw the problem as a major priority and it was being addressed by the Departments of Justice, Enterprise, Trade and Employment and Transport and Tourism.
"What we intend to do is transform the whole system of civil liability, the insurance market and the public attitude to insurance claims so that the level of imposition on enterprise in Ireland, which is now constituted by employers' liability and by public liability will be reduced," Mr McDowell said.
Radical change on many issues would be involved. These included the accident rate in Ireland, the "claims" mentality and the legal system culture.
However, there were signs that premiums were beginning to tumble already, he said, because there would be increased competition, lower accident rates and less fraudulent claims.
The Minister hopes to present the proposals to the Dáil before the summer recess.