Credibility of insurance reform process damaged as liability insurers pocket benefits

  • The total number of claims in the country has been falling dramatically since peaking in 2016; the 2022 total will be the lowest in over 15 years1
  • Overall, the average award in Jan-Jun 2022 was €14,786, 38% lower than before Judicial Guidelines were implemented
  • PIAB reports average acceptance rate of awards has risen to 48%, up from 36% in May 2021
  • Liability insurance premiums continue to increase

The Alliance for Insurance Reform has called on Government to get serious with the insurance industry following confirmation from the Personal Injuries Assessment Board (PIAB) that the new Judicial Personal Injuries Guidelines continue to have a very positive and improving impact on personal injury claims costs.

Peter Boland, Director of the Alliance, said “We welcome today’s report from PIAB showing serious reductions in the total number of personal injury claims, the average awards and the numbers of claimants heading to litigation. Liability insurers are pocketing these benefits and it is up to Government to get serious with them to ensure that the benefits are passed on in premium reductions to SMEs, voluntary and community groups, charities and sports and cultural organisations struggling with the costs of staying open.”

Tracy Sheridan, owner of Kidspace play centres in Rathfarnham and Rathcoole and director of the Alliance said “Insurers have repeatedly and consistently maintained to the Cost of Insurance Working Group, the Personal Injuries Commission, the Oireachtas Finance Committee and elsewhere that the cost of claims drives the cost of premiums2. This analysis has been verified by the Central Bank’s National Claims Information Database3. The reforms implemented by Government and the Judiciary mean that the claims costs and future risk associated with every motor and liability policy in Ireland have reduced sharply since early 2021. This is being reflected in the competitive motor insurance market, but liability insurance premiums are actually going upwards, tracking +16% in our rolling renewals research.”

Eoin McCambridge, Director of the Alliance said “Insurers are taking liability policyholders and the Government for a ride and damaging the credibility of the Government’s insurance reform programme. From a policyholder perspective, it appears that all the gains being delivered are being used to improve underwriter profitability and bankroll the takeover frenzy in the insurance broker sector. Government must hold insurers to account to ensure that the gains from the Judicial Guidelines and other reforms are passed on immediately and in full. While Government frequently tells us that they cannot dictate premium prices, Government has enormous soft power over the insurance sector, a sector which needs our Government to allow it to function profitably. Additionally, the Department of Finance established an Insurance Competition Office in 2020 but has not yet succeeded in attracting additional underwriting capacity into the market. This office must begin yielding results soon as additional competition is the best way of keeping insurers honest.”

In conclusion Peter Boland said “The challenges of staying open for Irish SMEs, voluntary and community groups, charities and sports and cultural organisations have never been greater in our nation’s recent history. Of all these challenges, the insurance crisis is the one closest to being solved by Government. Insurers must act in good faith on the progress already made.”

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