Calls for greater transparency around insurance sector profits and 'secret settlements'
A GROUP campaigning for insurance reform has called for greater transparency around the profits earned by the sector and what it said were “secret settlements” being made by insurers.
The Alliance for Insurance Reform said there was an unaccounted for black hole of €2bn when premiums are compared with pay-outs to policyholders.
This is made up of secret insurance company settlements, legal fees, broker commissions and insurance company profits.
It said in 2017 insurers in this market took in €2.285bn in premiums.
In the same year there were total pay-outs of €276m, the Alliance alleges.
The Alliance said there was a paucity of data, but it was known that motor insurers made profits of €1.7bn overall in the 10 years up to 2014.
And it claimed that lawyer fees for personal injuries cases amount to €350m a year, enough money to build a 340-bed hospital every year.
Legal costs amount to 45.3pc of the awards, the Alliance said, quoting figures from the Government’s Cost of Insurance Working Group.
The Alliance said there had been just one prosecution for a fraudulent personal injuries claim since the current legislation came into effect in 2004.
In a publication entitled ‘Ireland’s insurance crisis; the facts’, the Alliance said there were 33,500 personal injuries claims in total in this country.
Some 1,800, or 5pc, were settled through the courts, with 7,000, or 21pc, going through the State’s Personal Injuries Assessment Board.
This means that 74pc of claims are settled by insurers or abandoned.
He said just six insurers control 89pc of the Irish motor market, with eight in control of 91pc of the liability market.
Alliance director Peter Boland said: "The absence of any real data from the State and its agencies has not only undermined the State’s ability to supervise the insurance industry but it has also created a vacuum into which vested interests have poured a stream of selective, self-serving data and research."
He questioned the abolition of the Blue Book insurance industry statistics by the Central Bank since 2015 with no replacement data proposed or planned.
Mr Boland added that a report on the impact of legal and other fees on personal injury awards was due to be completed last year.
It has not been commenced yet and the latest update suggests that it will take two to four years before data is available, he added.
Representative body Insurance Ireland said insurers have opened their books and provided data on five occasions in the last two years to allow comparisons of our cost of claims.
"The problem is the same as was identified by us in 2015. We have high claims costs and high settlement costs, yet they have not been tackled."
He said that from 2013 to 2017, Insurance Ireland’s non-life members made underwriting losses of €1.1bn.