Large increases in motor premiums are not good for motorists or insurers. They lead to insurance becoming unaffordable for many people and higher rates of uninsured driving, which creates major road safety issues.

Our customers are having a tough time and there is understandable frustration at rising premiums. Insurance Ireland is concerned about the ongoing volatility relating to claims as the rise in premiums is directly linked to the increased number of claims and increased cost of claims, such as high awards and legal fees. For example, eight out of every 10 motor injury claims in Ireland are for whiplash and our average whiplash settlement is €15,000 compared with €5,000 in the UK.

For over 18 months, Insurance Ireland has been calling for urgent action to be taken to address the spiralling cost of claims by:

•Passing legislation to strengthen the role of the Injuries Board to help reduce expensive legal costs

•Increasing sanctions for those who are convicted of insurance fraud to deter offenders

•Internationally benchmarking awards to levels in other jurisdictions

•Resolving the Setanta Insurance Judgement so its competitors are not asked to bail out a failed insurer 

•Increasing road traffic enforcement: There’s simply no substitute for law enforcement

Ends.

Notes:

•The number of formal awards made by the Injuries Board increased 32% from 2008 to 2015.

•The Bodily Injuries Review published by the Central Bank of Ireland highlighted an increase in cost and frequency of claims. According to the Central Bank the average cost of claims in Motor Insurance rose by 8%, for Employers Liability it rose by 27% and for public liability it rose by 8% between 2012 and 2014.

•The Injuries Board costs are 6.5% versus 60% in litigated cases. http://www.injuriesboard.ie/eng/News-Information/Press-Releases/Injuries-Board-2015-Annual-Overview.pdf

•The increase in the frequency of claims is apparent from the figures produced by the Injuries Board. Since 2008 there has been a 36% increase in the claims submitted over a period where cumulative economic growth was less than 13%.

•The OECD have found that Ireland is the 8th most expensive country in which to enforce a contract. 

•The CSO who have said legal costs in 2015 were on a par with 2008 figures.

•A third of Irish drivers involved in fatal collisions have no insurance according to the Road Safety Authority.