Insurance Ireland Proposes Range of Measures to Address Increases in the Cost of Claims

[Brendan Burgess]

Press release issued today

• Excessive Cost of Claims in Ireland Leading to Increases in Motor Premiums

• Average cost of whiplash in Ireland is €15k, average cost in the UK is €5k

• Other factors such as Setanta judgment will also impact premiums in Ireland
  
  
  

Measures to limit the increase in premium costs for consumers

Outlining the measures that could limit the increase in premium costs to consumers and businesses, Insurance Ireland recommended the following:

• With increased motoring activity on our roads, ensure An Garda Siochana and the Road Safety Authority are supported to maintain an adequate level of enforcement

• Compensate victims at reasonable levels which society can afford.

• Reduce legal costs, which are still too high and which have never been tackled in litigated cases.

• Ensure flaws in the Injuries Board process are tackled so that claimants are required to turn up for Injuries Board medicals and to provide loss of earnings information.

• Act to ensure fraudsters are deterred. Suspended sentences are not an adequate deterrent and give the impression that there is no downside to insurance fraud if caught.

• Fix the Setanta problem by amending the relevant legislation and the MIBI Agreement so that the roles of the ICF and MIBI are clear and unambiguous: ICF to deal with insolvencies generally and the MIBI to deal with claims from victims of uninsured and untraced drivers.

 

[Ravima]

High Court average is skewed by the obstetric negligence awards. One of these was for €15m. the Circuit Court averages are probably truer averages with the caveat that the Circuit Court limit was increased from €38K to €60K, so a few of the awards in excess of €38K would affect this average.

Having said that, the trend in courts seems to be for slightly higher awards in Circuit Court, but the resultant costs are huge and as a percentage of the Award can be over 100%! The costs are often referred to as 'legal' costs and people tend to read this as money for solicitor/barrister. However, the costs include 23% VAT and as well as solicitor and barrister, also include motor assessor, engineer, doctor, and other witness expenses.

 

[Malcolm Tucker]

They have a point on the legal costs. Even given all the shenanigans in the Department of Justice over the last while, we've gone through almost an entire Govt term and the Legal Services Bill is yet to be enacted.

Someone should ask Insurance Ireland though why so many of their members drove insurance premiums down to such unsustainable levels when there was such a lack of reform on the claims costs side? There's a whole generation of young Irish people who have known nothing but (comparatively) cheap car insurance. They're in for a bit of a shock over the next few years as prices return to more sustainable levels.