Urgent steps need to be taken to address the accelerating cost of insurance claims, Insurance Ireland will tell an Oireachtas committee on Tuesday.
In its submission to the committee on business, enterprise and innovation, industry body Insurance Ireland said it was “determined to bring sorely needed reform to Irish claims costs”.
It detailed the need for more effective deterrents to combat insurance fraud and said the design of the book of quantum needs to be addressed, in effect regularising the amounts a person could claim. The book of quantum sets out general guidelines as to the amounts that may be awarded in personal injury claims.
“If these steps are taken as a matter of urgency it is our belief that the accelerating cost of claims would effectively be addressed, which would consequently assist in managing the insurance costs which are currently impacting businesses and motorists alike,” Insurance Ireland noted in its submission.
Insurance Ireland illustrated the issue with personal injury awards in Ireland by comparing an award for an ankle injury here and in the UK. In Ireland, it said, an award of up to €54,000 could be gained from a minor ankle injury while in the UK that would be up to €12,554.
Recommendations
The Oireachtas committee in question is looking into the cost of doing business in Ireland and plans to publish recommendations by July to improve the competitiveness of Irish businesses.
The cost of insurance is seen as a significant one for Irish businesses, and claims volatility in particular is prompting calls for reform.
Market trends highlighted by Insurance Ireland detail the need for reform in the sector. It said there has been a 48 per cent increase in the average Circuit Court award between 2013 and 2016.
Additionally, it noted the average award given by the Personal Injuries Assessment Board (PIAB) in respect of employer liability increased 30 per cent between 2011 and 2016. Similarly, the average personal liability PIAB award increased 17 per cent in the period.
“It is our belief that there is a significant opportunity to bring about structural reform in 2018 and all stakeholders should redouble their efforts to ensure this occurs,” the body will tell the committee.
In its submission, Insurance Ireland detailed its "commitment to reform" in the sector. It has provided a methodology to allow for returning immigrants to benefit from foreign driving experience and is working with the Personal Injuries Commission to facilitate the international benchmarking of awards.
The committee is scheduled to meet at 4pm on Tuesday.
