Central Bank Report underlines need for insurers to pass savings onto consumers – Pearse Doherty TD
Sinn Féin spokesperson on Finance Pearse Doherty TD has called on the insurance industry to immediately reduce premiums in line with reduced personal injury awards.
This comes following the Central Bank's report today which shows that the average premium for employer and public liability rose by 24% between 2013 and 2019, and more than doubled in the Arts, Entertainment and Recreation sector.
The Donegal TD also called for further reforms, including legislative changes to the Duty of Care, and an information campaign to underline the benefits and reduced legal fees in settling through the Public Injuries Assessment Board.
Speaking this afternoon, Teachta Doherty said:
“Today’s report by the Central Bank on the Employer and Public Liability market underlines the insurance crisis that has faced small business, voluntary and community groups for far too long.
“The Central Bank has found that between 2013 and 2019, the average premium in this sector has increased by 24%.
“For certain sectors, the increased cost of insurance is shocking and completely unworkable.
“For example, the cost of employer and public liability insurance in the Arts, Entertainment and Recreation sector has more than doubled.
“We know that other sectors have seen higher increases in their insurance costs with many underwriters leaving the market altogether.
“This damages communities, jobs and local economies, and represents a growing market failure.
“We can also see that many of the losses suffered by insurers have been caused by reduced investment income and increased commission paid to brokers, rather than the cost of claims.
“For example, the average cost of claims in public liability insurance fell by 22% from 2015 to 2019, with the overall claims ratio falling to its lowest level in a decade of 56% in 2019.
“It is now essential that insurance companies immediately reduce insurance premiums reflecting, euro for euro, the 50% reduction in personal injuries awards since the new Personal Injuries Guidelines came into effect.
“And I would call on the Government to remove the 9 month stay on my Judicial Council (Amendment) Bill which would require the industry to report how it has, or has not, passed these savings onto consumers to the Central Bank for each of the next four years.
“This would have allowed the Dáil to hold the industry to account, similar to regulations adopted in Britain in response to a reduction in whiplash awards.
"The report also shows that fees paid to lawyers for settlements below €150,000 were 32 times higher when public liability claims were settled through the courts compared to the Personal Injuries Assessment Board (PIAB), while compensation for claimants was actually lower in the courts compared to PIAB, with claims taking 2.7 years longer to settle.
“It is clear that the big winners in settling claims through the courts are not claimants or customers, but the legal industry.
“We need therefore to strengthen PIAB and I am also calling on the Government to launch a public awareness campaign to inform consumers of the benefits of PIAB in comparison to settlements through the courts; which take longer, result in similar compensation with the only gains going to the legal industry.
“It is also clear that further reform is needed in the insurance sector, with a particular focus on legislative changes to the duty of care, in order to stamp out insurance fraud and ensure an appropriate balance in the responsibilities between parties.”