Commenting on the publication of the emerging recommendations the CEO of Insurance Ireland, Kevin Thompson said “We are pleased that Minister Murphy has today published a list of emerging recommendations arising as a result of the work of the Cost of Insurance Working Group. Insurance Ireland has been calling for this much needed process of reform to be put in place for the last two years. We welcome todays publication and would call upon the Minister and his working group to implement these recommendations as a matter of priority, especially in relation to the level of awards. If this is done we believe that the escalating cost of claims can be comprehensively addressed. As we have done throughout Insurance Ireland will continue to work with the Minister to ensure the volatility in the cost of claims is brought under control.”

ENDS

Notes to Editors:

Insurance Ireland has been calling for the following reforms to be implemented:

1.       Internationally benchmark the Book of Quantum. Ensure the Book of Quantum is reviewed on a regular basis. As part of this review the Judicary should have a role in drafting the contents of the Book of Quantum (this is the case in the UK). The size of awards should be internationally benchmarked.

2.       Consistency in awards to help reduce volatility in the market. Inconsistent awards increase volatility which is reflected in pricing

3.       Tackle whiplash: Eight out of every 10 motor injury claims in Ireland are for whiplash and awards here are three times UK awards (€15,000 v €5,000). Premiums are a function of the cost of claims so high awards mean higher premiums

4.       We have toreduce legal costs. The National Competitiveness Council said legal costs are at a six-year high. Injuries Board costs are 6% versus legal costs of 60% in litigated cases

5.       Reinforce the powers of the Injuries Boardto resolve more claims and reduce costly legal fees. Insurance Ireland is supportive of the Injuries Board and its good work, including the swifter settlement of claims, but the claims environment has changed and it needs new powers. These include simple things like compelling claimants to provide loss of income information and to attend medicals. Insurance Ireland first made these points in 2014 and they should be legislated for as a matter of urgency

6.       Fix Setanta: The Government’s proposed policy response to address the claims of an insurer in liquidation poses a systemic risk to the motor insurance market. This policy exposes insurers to unlimited liabilities of competitors which would have to be factored into pricing. No other industry has to do this – it’s the equivalent of Dunnes bailing out Tesco

7.        Act to ensure fraudsters are deterred. Suspended sentences are not an adequate deterrent. Insurance Ireland believes that convicted insurance fraudsters should face the full rigours of the law in terms of custodial sentences.

8.       Further increase the resources given to road traffic enforcement – there’s no substitute for enforcement

Media contact:

John Byrne

Communications Manager, Insurance Ireland

Tel: 01 644 7781 / 087 9383852

Nuala Buttner

Q4 Public Relations

Tel: 01 475 1444 / 085 174 4275