In the Irish Independent on the 12th August last, under the Title “Motor Insurance soars by 70% in just 3 Years”, Charlie Weston reported that premiums look set to keep rising. Michael Horan of Insurance Ireland, which represents insurers, said that premiums were being pushed up by higher claims awards and drivers claiming more frequently. He called for greater powers to be given to the Injuries Board to ensure that fewer personal injuries cases end up in the courts, where legal fees add hugely to the cost of settling claims. But is this correct?
Both the Law Society and the Bar Council have made Submissions to the Joint Committee on Finance, Public Expenditure & Reform and the Taoiseach in which, in summary, they have stated:
(i) The lack of transparency and incomplete disclosure by the Insurance Industry is a significant barrier to a comprehensive understanding of the Claims environment;
(ii) Financial mismanagement and imprudent pricing by the Insurance Industry during 2012-2014 has led to premium increases in order to restore profitability;
(iii) As highlighted by Dorothea Dowling, a €1 billion discrepancy between the income of Irish Insurers and published Awards warrants investigation;
(iv) There has been an increase in the number of Claims but this is due to increased economic and social circumstances where there is increased volumes of traffic on our roads and consequently more Premium income for the Insurers;
(v) No significant increase is evident in the number of Claims being made through the Injuries Board and Court Awards levels remain constant.
There is more detail on these Submissions on the above Links.
The One Unheard Voice
As the Law Society has pointed out, the one unheard voice in this debate, unlike the very strong Insurers` lobby, is that of the most vulnerable and the least represented. The victims of road traffic accidents have no representative organisations and no PR juggernaut to constantly enforce their message in the media.
No dramatic increase in the size of Court Awards
As Irish Times journalist Colm Keena wrote in his Article “What is weighing down the Car Insurance Industry?” on the 4th September 2016, had there been a dramatic increase in the size of Awards being given out in the courts, one would expect this to contribute to an increase in the percentage of PIAB assessments being rejected by claimants who chose to go to court instead. But this is not the case.
Keena points to the fact that, unlike many other jurisdictions, including the UK, the Irish car insurance market does not have publicly-available aggregated information on issues such as the number of claims each year, their average size, the legal costs associated with processing the claims, etc. He correctly concludes:
“If we want to diagnose what is wrong with the car insurance market here, a good place to start would be with a reliable examination of the patient. That might allow the contributors to the huge rise in premiums to be identified, and each to be given a relative weight. What to do about the crisis could then be addressed.”
Inter-departmental Working Group on Insurance Costs
An inter-departmental working group on insurance costs, headed up by Minister of State Eoghan Murphy, held its first meeting on July 20, but unfortunately then took a break for the Summer! Now is the time to put pressure on your political representatives to ensure that this Working Group scrupulously investigates this issue without further delay and makes the Insurance industry justify these very steep Premium increases.
This BLOG was written by Brian Morgan, Litigation & Employment Law Solicitor with Morgan McManus Solicitors who represents Claimants in Road Traffic Claims, Clinical Negligence Claims, Workplace Accident Claims and related Court Actions.