Business people and community groups have rounded on the insurance industry for failing to pass on the massive savings it is making from a significant drop in the value of injury claims payouts made last year.
The €141m in claims awarded by the Personal Injuries Assessment Board (PIAB) last year was the lowest figure in 16 years. The PIAB said insurance premiums should fall as a result.
The Consumers’ Association of Ireland accused the industry of “gouging” its customers and claimed it was profiteering. Despite the 16-year low in the value of claims paid out last year, motor insurance premiums are on the rise again, according to the latest Central Statistics Office figures.
Inflation figures for October show motor premiums rose by 0.8pc when compared with a year ago. This is a reverse of the situation over the last few years when motor premiums were falling.
Businesses also said they continue to suffer from sky-high insurance premiums.
The average value of an injury compensation award has dropped by 35pc compared with 2020.
The PIAB is a state body that adjudicates claims without involving courts. It issued two reports showing the cost of compensation claims in Ireland has fallen sharply since 2019, with far fewer claims being received and a reduction in the value of average awards.
The Consumers’ Association of Ireland and the Alliance for Insurance Reform reacted with fury to the revelation of a collapse in claims levels, saying this was not being reflected in premium rates.
“The insurance industry is taking us for a ride. They are gouging us and profiteering. They should be slashing premiums for consumers and for businesses,” said Michael Kilcoyne, chairman of the Consumers’ Association of Ireland .
He claimed the insurance industry has now been given everything it had asked for from the Government in terms of insurance reform.
Mr Kilcoyne said the Personal Injuries Guidelines had seen award levels cut by up to 40pc, duty-of-care legislation had been updated to the benefit of insurers, a dedicated garda fraud office has been set up, and the PIAB has been reformed.
“What will it take for the insurance industry to play fair with policyholders?” he asked.
PIAB chief executive Rosalind Carroll said last year had seen continued reductions in the volume of personal injury claims being made to the board. There was also a reduction in average award levels. This should lead to lower premiums, she said.
“The combined impact is that the overall cost of claims has dropped significantly, which should have a very positive impact on insurance premiums,” she said.
Brian Hanley of the Alliance for Insurance Reform said politicians and the public were being “taken for a ride by insurance companies”.
“The volume of claims has plummeted in recent years, with the size of awards dropping substantially also, post the introduction of the judicial guidelines.”
Mr Hanley said PIAB’s report shows the total value of awards is down €139m since 2019.
“Surely small businesses, voluntary, sports and other organisations in our communities are entitled to see a portion of that money in the form of reduced premiums, especially for public liability. Shame on those insurers that kept it all for themselves,” Mr Hanley said.
Neil McDonnell, chief executive of employers’ group ISME, said the cost of employers’ liability and public liability insurance continues to rise, with many underwriters refusing cover altogether.
Asked if it was gouging its customers, industry representative group, Insurance Ireland, claimed it is not accurate to say that motor premiums are increasing. Irish consumers have been benefiting significantly from the various reforms introduced by Government and are now benefiting from some of the lowest motor premiums in Europe, it said.
Motor insurance premiums have decreased significantly over the last six years by approximately 40pc since the first quarter of 2017, Insurance Ireland added.
Currently, the average motor premium in the Republic is around €575, compared with around €1,000 in the UK and over €1,100 in Northern Ireland.
“The slight increase in motor premiums of 0.8pc in CSO figures from October reflects inflationary pressures in the supply chain for motor repair costs and in no way compares to the significant quantum of reductions over the last six years,” an Insurance Ireland representative said.
They said the increase in the year to October also compares favourably to the 29pc increase in the UK in the same period. “The accusation that insurers are ‘gouging’ customers in Ireland is simply not true.”
