Issued Tuesday, 8 December, 2020. Insurance Ireland has welcomed the publication today of the Action Plan for Insurance Reform, which it says will bring focus to reducing the cost of claims in the market for the benefit of policyholders.
Moyagh Murdock, Chief Executive of Insurance Ireland said:
“Our members have been seeking reform for many years, including the urgent need to tackle the high cost of claims in Ireland.The commitment to establish a working group to deal urgently with insurance reform was very welcome and we look forward to working with everyone involved to expedite the changes required in this Action Plan in the best interests of policyholders.”
Insurance Ireland particularly welcomed the recognition of the Personal Injuries Guidelines Committee under the Judicial Council to provide guidance on personal injury claims, as well as the monitoring of whether insurance awards need to be capped.Insurance Ireland believes this is a very important step, which along with the PIAB reforms among other areas, will be vital in achieving real change in Ireland’s cost of claims regime.
Moyagh Murdock explained:
“Recent motor claims data published by the Central Bank of Ireland showed that premiums reduced 4% between 2018 and 2019 and 9% between Q2 2018 and Q4 2019, an indication that the market is turning. A more stable sector, delivered through Government reform, will reduce volatility and deliver better value for consumers.A stable, healthy and profitable insurance sector is fundamentally important in a functioning economy, facilitating business and enabling citizens to go about their daily lives securely.
“The key point, which we made on the publication of the recent Central Bank report, is that the sector wishes to operate in an environment that is less volatile delivering more consistent outcomes for customers. The key lever in reducing volatility is the delivery of reforms needed to reduce the high and inconsistent cost of claims. That’s why we fully support the Government’s reform agenda through the personal injuries guidelines, the strengthening of PIAB and the review of duty of care laws among other areas. This in my view will deliver better value for consumers in the long run.”
Moyagh Murdock continued:
“We are very pleased to see the action around enhancing PIAB and would like to see this being progressed as quickly as possible. It is crucial that we see a strengthening of their ability to settle cases so that less claims go to the courts, where the legal costs add so much to the overall cost of settling claims.
We also welcome the Government reiterating its commitment to the review of the duty of care laws. We firmly believe that rebalancing the duty of care applied to policyholders is an essential part of the reform agenda.
Another welcome action is the commitment to tackling insurance fraud. While the vast majority of claims are genuine, the reality is that the high levels of compensation awards is an incentive for fraudulent activity, and we believe the converse will be the case once the high cost of claims has been reduced.
Furthermore, we welcome that the Plan will result in it being easier to prosecute perjury to deter people from telling lies in court and walking away without consequences. This is an important step in the reform process.
In addition, we welcome the announcement that a new office will be set up to increase competition in the insurance sector. Not only will more competition benefit the consumer, it also aligns with our ambition to further grow our sector and contribute to the economic recovery after Covid-19. Ireland is an international hub for insurance, employing 27,000 people and managing €303 billion in assets, but we want to see those numbers grow further.
We also remain fully committed to working with the Government and the Central Bank of Ireland on the ongoing review of differential pricing practices. Our members have cooperated with the process so far and will continue to do so.
Other actions including enhancing transparency through expanding the National Claims Information Database and enhancing the powers of the CCPC are also positive steps. Insurance Ireland welcomes any measure that will result in a stronger, more stable insurance sector for consumers and insurers alike.
We look forward to engaging with the Ministers in the coming days to reiterate our commitment to working with them to implement the plan.”