The average awards made by the Injuries Board for car crash claims have been stable for the past six or seven years, an Oireachtas committee examining price increases in car insurance has been told.
Stephen Watkins, director of corporate services with the board, said the average award was €21,730 per claim in 2013 and to the end of June this year, the figure was €21,782.
He told the Joint Committee on Finance on Wednesday that over the last six of seven years, awards by the board, which assesses personal injuries, had been “basically stable”.
He also said 90 to 95 per cent of claimants were represented by solicitors, but whether they were represented or not, the awards were the same.
Awards static
Conor O'Brien, chief executive of the board, said insurance premiums were up by 70 per cent in three years, but motor claim volumes and the average value of awards were static this year.
Between 2013 and the end of 2015, the number of motor claims before the Injuries Board increased by less than 5 per cent.
According to the Central Statistics Office, car insurance has increased by more than 38 per cent in the past year. The industry has attributed the increases to a higher numbers of claims, higher awards, high legal costs and increases in fraud.
The finance committee has been examining the reasons behind the increases at a series of hearings since last week.
Whiplash
Maurice Priestley, director of operations at the board, said between 70 and 80 per cent of motor injury claims related to soft tissue injuries of back and neck, known as whiplash.
The motor insurance industry assertion, that those injuries attract an average settlement of €15,000, was “not unreasonable” he said, but it had “always been that way”.
There was no suggestion it had changed over the years, so why it had been identified now as a factor in increasing insurance premiums was “hard to understand”, he said.
Gary Dunne, chairman of the Society of Actuaries of Ireland, said the group welcomed the call for greater transparency around motor insurance data.
“There has been some criticism of the lack of information on claims and market trends in the Irish motor insurance sector,” he said.
“ This contrasts with the availability of information in the US and the UK.”
He said evidence-based research was vital to underpin informed policy making. There were “too many anecdotes and not enough evidence” about costs of premiums he said.
Competition law
Mr Dunne said the organisation had considered collecting data on claims and awards from insurance companies, and the companies were co-operative, but the organisation had received legal advice that there could be issues with competition law.
He said part of the increase in premiums reflected the need of the industry to restore prices to “a correct level”. He said premiums had reduced between 2003 and 2010 by 27 per cent.
After this, Quinn Insurance went into administration, there were losses and court cases, including the Setanta case. Prices were too low, he said.
Asked by Deputy Pearse Doherty (SF) whether it was a model for insurers to offset underwriting loses with investments, Mr Dunne said it was.
He agreed reductions in profits on investments were a component in the increase in insurance costs. He also agreed that he had worked for Zurich Insurance in the past, but said he was now a consultant.
The Society of Actuaries in Ireland has told the ‘Oireachtas Committee on Finance, Public Expenditure & Reform, and Taoiseach’ that evidence-based research is vital to underpin informed policy-making on the costs of motor insurance.
