Insurers insist premiums are falling under new rules

Insurance companies say they will “not be found wanting” in cutting premiums in the coming weeks after new guidelines came into effect which reduce general damages awards.

In lively exchanges at the Oireachtas Committee on Finance, Sinn Féin TD Pearse Doherty asked a number of insurance companies when they would pass on benefits to customers after the new judicial guidelines on personal-injury awards came into effect on April 24th.

Mr Doherty said the insurance companies were “pocketing huge amounts of money” and said people wanted to know when they would see reductions in their premiums.

Zurich Insurance chief executive Anthony Brennan said it had taken “years to get here. I have to ask you to allow us a few weeks to implement this and get this across to customers. We will not be found wanting.”

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He said the company had completed an initial analysis of the expected impact of the new guidelines on their future claim costs.

“Claims costs make up a significant part of premium so it is logical any reductions in such costs should positively impact premiums and in the coming weeks we are implementing changes to customer premiums to reflect the impact of this reform action on claims costs.”

“The new guidelines should lead to material reductions in general award levels and I also hope they will lead to an increased percentage of claimants accepting PIAB [Personal Injuries Assessment Board] awards.”

The chief executive of Aviva Insurance, Declan O’Rourke, said the company had “anticipated the changes and reduced premiums in advance of the new guidelines”.

The head of FBD insurance, Tomás O Midheach, said: “While we have yet to see the new guidelines reflected in awards by PIAB or in the courts, we have been proactive in reflecting their assumed future impact in the premiums now being quoted to customers.

“As the impact of the new guidelines translates into savings on claims costs, and we see other claims cost savings come through, for example, following an increase in the proportion of injury claims being handled by the Personal Injuries Assessment Board, we will look for further opportunities to adjust premiums in response.”

Mortgage protection

The insurance companies also addressed concerns that home purchases were being put at risk after it was reported that some people had been turned down for mortgage protection after they had Covid-19.

In a statement to the committee, Aviva Life and Pensions said that while it was “unlikely” that questions about Covid-19 would impact on an application, it depended on the severity of infection and any “residual medical complications”.

The company said that at the underwriting stage of a policy, insurers are “required by legislation to ask specific questions of potential policyholders in order to accurately assess the risk involved”.

“Key to this assessment is the existence of a relevant medical condition. In a new application, questions are asked about relevant medical conditions such as asthma, bronchitis, heart conditions, stroke and so on. Given the ongoing pandemic, it is understandable that Covid-19 would be included as a relevant condition on a new application.”

“In Aviva, we are specific in the questions which we ask to assess risk under the policy. However, it is unlikely for the majority of cases that, once the applicant has recovered from Covid- 19, the responses to these questions would have any impact on the policy they are seeking to take out.

“However, this depends on the individual case, the severity of the impact of the infection and evidence of any residual medical complications. For applicants who are displaying symptoms, undergoing testing, have a positive Covid-19 diagnosis or have recently recovered from Covid-19, the policy commencement may be deferred for a short period.”

The company said that up to the end of April 2021, less than 0.6 per cent of protection applications were deferred for a short period of time to allow for recovery from Covid-19 symptoms.

The company also said that mortgage-protection cover and life-assurance cover would continue to apply “in the unlikely event that the life assured dies as a result of a negative reaction to a Covid- 19 vaccination. This is irrespective of the type of vaccine involved, once that vaccine has been authorised for use in Ireland and administered in accordance with that authorisation.”