Public liability insurance premiums keep rising despite drop in value of awards

Public liability insurance premiums continue to rise despite a significant fall in the size of injury awards, the Alliance for Insurance Reform said on Friday in the wake of a report showing awards have fallen by an average of 40 per cent.

The director of the Alliance, Peter Boland, said that motor insurance premiums are coming down, but that this is not the case with public liability insurance.

He said the alliance, which campaigns for insurance reform on behalf of a range of civic and business organisations, welcomes the report from the Personal Injuries Assessment Board (PIAB) showing a sharp fall in the value of awards since the introduction of new guidelines by the judiciary last April.

“While we are seeing some downward movement in motor insurance premiums, the experience of SMEs, voluntary and community groups, sports and cultural organisations, and charities, is that renewals are actually increasing right now.”

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He said the insurance sector could not have its cake and eat it. “They identified the cost of claims as the key driver of insurance costs, and this has been addressed by the Government and the judiciary.”

The alliance has identified 37 sectors where there are no underwriters, or only one underwriter, willing to get involved in the provision of cover, he said.

The PIAB report was also welcomed by Neil McDonnell, chief executive of the small and medium-sized business organisation, Isme.

He said Isme would now like to see the Government implement a provision of the Civil Liability and Courts Act 2004 that provides for the creation of a register of the parties taking personal injury actions, in order to identify potential abuses of the system by persons who make multiple claims.

He said the courts are seeing “dubious, implausible, or plainly fraudulent cases” being presented to the courts every week.

Insurance Ireland, which represents the insurance industry, also welcomed the PIAB report but said competition law prevented it from commenting on future pricing.

“Our members continue to strongly support the new Guidelines and the Action Plan for Insurance Reform and believe that a more stable sector, delivered through Government reform, will reduce market volatility and bring more certainty for customers and insurers alike.”

“Insurance Ireland is prohibited from commenting on future pricing, but we believe that meaningful reductions in award levels will lead to decreased volatility and increased competition in the market over time.”

It said the public liability and employer’s liability section of the market remained very challenging.

Other areas of the Action Plan for Insurance Reform now needed to be progressed, it said, and cited the strengthening of the powers of PIAB, the rebalancing of the duty of care between business and the citizen, and increasing competition in the market.

"It is particularly crucial that we see a strengthening of PIAB's ability to settle cases so that fewer claims go to the courts, where the legal costs add so much to the overall cost of settling claims," said CEO Moyagh Murdock.

Pat McDonagh, the owner of Supermacs, called for the immediate reform of PIAB so that it could assess the value of all personal injury claims with recourse to the courts only on a point of law.

“We are in danger of our society losing faith in the judicial system,” he said. “I can tell you from my experience that the business community certainly has.”