Calls on insurers to pass on reductions immediately and in full
The Alliance for Insurance Reform has welcomed confirmation from Government that the new Judicial Personal Injuries Guidelines will take effect in April.
Peter Boland, Director of the Alliance, said “We welcome the sense of urgency in the Cabinet’s approval today of plans by the Minister of Justice to implement the new guidelines. Now it is time for insurers to outline very clearly how they intend to reduce premiums to reflect these developments.”
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 premium costs. This analysis has been verified by the Central Bank’s National Claims Information Database Private Motor Insurance Reports. The changes implemented by the Judicial Council and accelerated today by Government mean that the risk associated with every policy will reduce sharply from next month. This must be immediately reflected in renewals for motor and liability insurance cover.”
Eoin McCambridge, Managing Director of McCambridge’s of Galway and Director of the Alliance said “Government must act robustly if necessary to ensure that the gains from the Judicial Guidelines and today’s Cabinet decision are passed on immediately and in full by insurers. Any delays or half-hearted measures will undermine the credibility of the reform process. Furthermore, if insurers do not deliver on the reasonable expectations of policyholders, Government must legislate to monitor and hold them to account in the way that the UK authorities recently have with insurers there, following reforms.”
In conclusion Peter Boland said “It must be remembered that getting insurance costs down means cutting the general damages paid out for minor, fully recovered injuries to reflect international norms. We have written to An Tánaiste Leo Varadkar, in his role as Chair of the Cabinet Committee Sub-Group on Insurance Reform, asking Government to take control of the process and cap general damages such that damages for minor injuries are reduced by an average of 80% compared to the previous Book of Quantum guidelines. Equally, the committed–to reform of PIAB and the rebalancing of the duty of care must now be accelerated. But in the meantime, insurers must act in good faith on the progress already made.”
ENDS
NOTES:
“Insurers repeatedly maintained to the Cost of Insurance Working Group, the Personal Injuries Commission, the Oireachtas Finance Committee and elsewhere that the cost of claims drives premium costs.
The insurance industry and other stakeholders have consistently pointed to increased claims inflation and claims frequency in recent years as the primary reason for the rise in cost of insurance. P42, Cost of Insurance Working Group REPORT ON THE COST OF MOTOR INSURANCE
Insurance Ireland representatives on the PIC have repeatedly stated that, as award levels and associated costs account for the bulk of the cost of insurance, if claims costs come down and are maintained at a consistent and predictable level then premiums will also reduce accordingly. P4, Second and Final Report of the Personal Injuries Commission, July 2018
“This analysis has been verified by the Central Bank’s National Claims Information Database Private Motor Insurance Reports”
See Alliance for Insurance Reform Fact Sheet No. 2 “Who Gets What?” graphic.
“If insurers do not deliver on the reasonable expectations of policyholders, Government must legislate to monitor and hold them to account in the way that the UK authorities recently have.”
“Therefore, at Report stage in the House of Lords, the government committed to bring forward an amendment in the Commons to provide an effective means of reporting on the public commitment made by the insurance sector. The aim of this amendment is to enable insurers to demonstrate that savings have been passed on to consumers and thereby hold insurers to account, in a way that is appropriate given the commercial sensitivities associated with this type of information. In developing this approach, the intent has been to balance the need to:
- Hold insurers to account in a way that is sufficiently rigorous; and
- Avoid intervening in an already competitive market or placing disproportionate burdens or insurers or regulators.”
Treasury Policy Note – expected Regulations to require insurers to provide information relating to the impacts of the Civil Liability Bill
“Damages for minor injuries account for the vast majority of compensation payouts”: See PIAB – Insights into the Personal Injury Environment, November 2019
Overall, the Alliance expects general damages for minor, fully recovered soft tissue injuries to be recalibrated in the manner reflected in the ISME Fair Book of Quantum which corresponds with our own independent academic advice.
The Alliance for Insurance Reform brings together 41 civic and business organisations from across Ireland, representing over 55,000 members, 700,000 employees, 614,000 volunteers and 374,000 students in highlighting the negative impact of persistently high premiums and calling for real reforms that will quickly reduce liability and motor insurance premiums to affordable levels and keep them that way. Our members include:
- AOIFE Ireland (Association of Irish Festival Events)
- Car Rental Council of Ireland
- Childminding Ireland
- Coach Tourism & Transport Council of Ireland
- Community Reuse Network Ireland
- Convenience Stores and Newsagents Association
- Cork Business Association
- Early Childhood Ireland
- Family Business Network Ireland
- Federation of Irish Sport
- Galway Chamber
- Galway City Business Association
- Galway County Public Participation Network (PPN)
- Home and Community Care Ireland
- Ireland Active
- Ireland’s Association for Adventure Tourism
- Irish Caravan and Camping Council
- Irish Concrete Federation
- Irish Hotels Federation
- Irish Road Haulage Association
- Irish Showman’s Guild
- Irish Street Arts, Circus and Spectacle Network
- Irish Travel Agents Association
- ISME
- Licensed Vintners Association
- Motorsport Ireland
- National Campaign for the Arts
- Nursing Homes Ireland
- Play Activity and Leisure Ireland
- Quick Service Food Alliance
- Restaurants Association of Ireland
- Retail Excellence
- RGDATA
- Sligo PPN
- Society of the Irish Motor Industry
- South Dublin County PPN
- Sport Ireland
- Union of Students in Ireland
- Vintners Federation of Ireland
- Volunteer Ireland
- The Wheel (Ireland’s national association for community, voluntary and charitable organisations)
For further details contact:
Peter Boland
ALLIANCE FOR INSURANCE REFORM
TEL: 086 826 6036
WEB: insurancereform.ie
FB: /insurancereformireland
TW: @InsuranceRefIre