Insurers blame claimants who reject awards for a small drop in auto premiums

MORE people are rejecting insurance settlement offers from the State Personal Injury Review Board in hopes of getting a larger settlement in court.

Insurance companies claimed that this was the reason why car insurance premiums did not fall much more.

Industry lobby group Insurance Ireland told an Oireachtas committee that the low uptake of PIAB’s settlement offers presents “significant uncertainties” for them.

The industry was commenting on why there hasn’t been a big drop in premiums a year after state judges agreed to personal injury guidelines.

Official statistics show auto premiums fell 11% in the year to March, but other forms of insurance actually rose in cost.

A large drop in premiums was expected when the Court Award Guidelines were implemented.

The guidelines recommended reducing award levels for minor injuries by around 50%.

This was expected to cause auto premiums to fall by at least 20%.

Personal Injury Assessment Board (PIAB) award levels have decreased by 42% on average since the guidelines were implemented last year.

However, the acceptance rate for PIAB assessments has dropped from 50% to 37% as more plaintiffs move on to litigation.

The Central Bank’s investigation has shown that there is little difference in award levels between PIAB’s liquidation offers and what people get when they go to court.

However, it takes years to obtain a court ruling, while the legal costs are substantial.

PIAB is a state agency created to support the resolution of personal injury claims without the need for litigation.

Insurance Ireland chief executive Moyagh Murdock told the Oireachtas Finance Committee: “We are concerned about the decline in the acceptance rates of PIAB awards by claimants since their submission.

“It is reasonable to assume that this trend is leading to more cases going to trial,” he added.

Ms Murdock said the personal injury guidelines had the potential to “represent a milestone for the Irish insurance market if applied consistently”.

Sinn Féin finance spokesman Pearse Doherty has proposed an amendment to the Judicial Council Bill 2021 to force insurers to state exactly what premium cuts they have implemented due to lower award levels.

He accused Insurance Ireland of pocketing savings from lower claims and not passing them on to policyholders.

Alliance for Insurance Reform director Peter Boland told the committee his organization was frustrated by what he said was extremely slow.

This is a time when many say high insurance costs pose a threat to their business.

The alliance represents charities, companies and voluntary groups and sports clubs.

He accused insurers of pocketing benefits from lower award levels and not passing them on to policyholders.

Boland said: “Of all the major challenges Ireland is facing right now, insurance is the one that the government can fix the fastest.

“But the reforms are not moving fast enough.”

A survey it conducted of policyholders to mark the first anniversary of the court guidelines found that 42% of respondents said insurance costs threaten the future of their organization. Nearly a third said insurance costs prevent them from providing certain services.

Boland said: “Ultimately, 90% of those surveyed said the government is not doing enough to address the problem of insurance costs.”

He wants the duty of care obligations imposed on companies and volunteer groups to be rebalanced.

He also wants the PIAB to be reformed.

Legislation to address this is slowly making its way through pre-legislative scrutiny, he said.

The state must vigorously defend multiple constitutional challenges to guidelines pursued by the legal profession in an effort to protect the revenue stream generated by personal injury litigation, Alliance said.

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