Insurers demand reforms to stem premium rises
Published 15/09/2015 | 02:30
Insurance companies are calling for major reforms of the legal system and changes to the State's compensation board.
The representative body for the sector, Insurance Ireland, wants reform of the Injuries Board, the implementation of legal sector reforms, and changes around the way medical experts are used in courts in a bid to stem the increases in premiums.
Motor premiums shot up by 7pc in August, taking the annual rise to 24.4pc, according to the latest Central Statistics Office inflation figures.
The rises in motor cover mean that a policy that was priced at €500 last year now costs €622 to renew, on average.
These are the biggest increases seen in more than a decade.
Home insurance has risen by 5.1pc in the past year.
Insurers have blamed higher premiums on increased awards being made in the courts due to a rise in the size of award that can be made in the circuit court.
In a report to be released today, and seen by the Irish Independent, Insurance Ireland will call for major changes to curtail premium rises.
The insurers will also argue that higher court awards are driving up fraudulent claims.
Insurance companies have said that higher average award levels being made in the High Court, along with changes in the size of award that can be made in the circuit court, are inflating claims.
This feeds into higher premiums, as more money has to be put into the insurers' reserves to allow for more claims and higher claims.
But this has been questioned by the Injuries Board, the State body that awards compensation in personal injuries cases.
Insurers want the Injuries Board reformed to stop so many people rejecting its settlements, and taking their claims through the courts. The insurers want to see the board's powers strengthened to penalise those who don't co-operate with its directions.
They are also calling for the promised reform of the legal profession to be enacted. Part of this would see the appointment of a chief legal costs adjudicator to provide guidelines on legal costs.
Insurance Ireland, which is headed by Kevin Thompson, is also seeking for a panel of independent medical experts to be in place for claims in the courts, rather than each side calling its own experts. This adds hugely to claims costs.
Insurers want a new approach to whiplash claims, requiring claimants to go to an independent medical expert rather than their own GP.
Some 80pc of claims are for whiplash, a soft tissue injury which is notoriously difficult to disprove. And when claims are settled, whiplash injuries represent a third of the money paid out by insurers.
Insurers are also seeking a sliding scale of awards, depending on the severity of the injury.