The Government’s latest report on the cost of insurance has been published by the Department of Finance today.
The publication of phase 2 of the Cost of Insurance Working Group Report states “there is a significant issue in relation to the cost of personal injury awards in Ireland for some commonly occurring personal injuries, particularly those of a less severe nature’”.
The report confirms that Irish award levels are significantly above those in the UK for minor, moderate and severe neck, back and ankle injuries.
Insurance Ireland has said the publication of Phase 2 of the report can help bring stability to Employers’ Liability and Public Liability insurance.
Fundamental insurance costs that make up the price paid by a business are to be tackled as insurers want reform, but the pace of the reform outlined by the report needs to be accelerated, according to Kevin Thompson, CEO of Insurance Ireland.
“This report confirms that our award levels are high relative to the UK with the report stating, ‘there is a significant issue in relation to the cost of personal injury awards in Ireland for some commonly occurring personal injuries, particularly those of a less severe nature’.
“This is evident with a minor ankle injury in Ireland allowing for an award of up to €54,700 compared to up to €12,554 in the UK,” he said.
Brian McNelis, Director of General Insurance Services at Brokers Ireland said: “Increasingly unpredictability in terms of outlay has crept into insurance costs for business and it is estimated that such costs may have increased by as much as 57% between 2011 and 2016.
“This is an impediment to doing business but as today’s report illustrates tackling such increases is multifaceted.
“Insurance protection is an essential element of doing business, as is the existence of a financially stable insurance sector.
“Essentially today’s report is about finding a fair balance between the two.”
The Alliance for Insurance Reform has criticised the Government’s report.
Peter Boland, spokesperson for the Alliance said: “Today’s report is an embarrassment to a Government that claims to be on the side of small business owners.
“Its main recommendations call for more reports and analysis while asking kindly for the insurance industry and legal profession to cooperate. The only Republic of Opportunity we see is the one exploited by the insurance industry and legal profession as Irish businesses and charities are bled dry.”
A survey of 950 members of Alliance organisations, carried out by Amárach Research found that since 2013, nearly half (47%) of respondents have seen their premiums rise by over 30%, while over one fifth have even seen rises of over 70%.
Two thirds of respondents also reported having increased excesses or new exclusions added to their policies -creating more risk and exposure to cost.
The top impacts of this on their organisations included inhibiting their ability to grow (47%), threatening the future of their organisation (45%) and making jobs less secure (25%).
- Digital Desk