Insurance Ireland Statement on the Central Bank’s First Report on the EL, PL & CP Markets

• Report shows that the employers’ liability (EL), public liability (PL) and commercial property (CP) insurance markets have been and remain very challenging markets for insurers in the last decade.
• Findings reiterate the importance of implementing the measures in the Government’s Action Plan for Insurance Reform as quickly as possible in order to attract more players into the market and bring more consistency for SMEs and insurers alike.
• Duty of care laws should be rebalanced in a way that is reasonable, practical and proportionate for claimants, businesses, sporting clubs and community groups alike. As things stand, too much responsibility is put on the business.

Wednesday 14th July 2021 – Insurance Ireland today commented on the publication of the Central Bank’s first report on the employers’ liability (EL), public liability (PL) and commercial property (CP) markets.

Moyagh Murdock, CEO of Insurance Ireland said: “We welcome this new report, which is useful and informative for all stakeholders. The report reiterates the importance of implementing the measures in the Government’s Action Plan for Insurance Reform as quickly as possible. We have called for these measures for many years and believe that they will be the key driver in ensuring that affordable and sustainable cover is available to SMEs and consumers into the future.”

The data shows that:

• The average cost of an EL claim increased by 31%, and the average cost of a PL claim increased by 16% between 2009 & 2019.
• In contrast, the average earned premium for all packaged policies (or the majority of policies; 86%) increased by 4% from €2,188 in 2009 to €2,269 in 2019.
• Insurers’ net insurance-related result as a proportion of total income was a 2% loss across 2009 -2019.
• Legal costs for injury claims settled through litigation average at 56% of compensation costs; this compares with 14% for direct settlements and 5% for PIAB settlements.

Moyagh Murdock continued: “As the figures show, the employers’ liability, public liability and commercial property insurance markets have been and remain very challenging markets for insurers in the last decade.

“We also note that the report contains data from undertakings still active in the market, which means it does not include data from insurers that exited the market, or entered and left the market rapidly, or where insolvencies have occurred, which would provide starker evidence of the challenge facing these markets.

“The main driver of this challenge is the volatility and unpredictability of the personal injuries claims environment up to now, which in turn leads to volatility and unpredictability in insurance premiums for SMEs.”

Moyagh Murdock reiterated Insurance Ireland’s support of the Government’s Action Plan for Insurance Reform and once again underlined the importance of speedy implementation of the relevant measures in this context, including the Office for Promoting Competition in the Insurance Market at the Department of Finance, the Personal Injuries Guidelines, strengthening the powers of PIAB and rebalancing the duty of care laws. 

“Our members wish to operate in an environment that is less volatile delivering more consistent outcomes for customers. The new Office for Promoting Competition in the Insurance Market at the Department of Finance, combined with measures to tackle the high and inconsistent cost of claims such as the new Personal Injuries Guidelines, strengthening the powers of PIAB and rebalancing the duty of care laws, will be crucial in this regard.

“Duty of care laws should be rebalanced in a way that is reasonable, practical and proportionate for claimants, businesses, sporting clubs and community groups alike. As things stand, there is far too much responsibility put on the business when it comes to commonplace injuries like slips, trips and falls.

“In relation to the new Guidelines, we are starting to see positive results through the latest PIAB data but, given the small proportion of claimants that have used the PIAB system up to now, it will be important to see similar data from the Courts system as quickly as possible.

 “Results in these areas will be central to attracting new players into the market. That is why we strongly support the Government’s work in this space. This in our view will deliver better value for businesses and consumers in the long run.”