‘Claims culture’ could see insurance premiums rise

Consumers and businesses could be hit with higher insurance premiums if an “emerging claims culture” is not addressed, according to the Injuries Board.

However, the volume of serious injuries as a result of road traffic collisions is grossly understated, the board revealed yesterday in its annual review.

The Injuries Board saw compensation awards rise 3.9% to €218m last year, and there has been an increase of almost 25% since 2007. Motor claims alone have jumped by over 33% in the last five years.

Patricia Byron, CEO of the board, said: “The steady but consistent increase in claims volumes over the past five years is a real concern at a time when our roads have never been safer and we have fewer people at work.

“The trend coincides with a significant increase in promotion and advertising by claims handling intermediaries.

“Last year, the Injuries Board raised concerns that specialist, claims handling firms were promoting a claims culture that could result in higher insurance premiums for consumers and business and a decline in competitiveness. We need to learn lessons from the UK market, where claims handling services are promoted heavily and whiplash claims have increased by 60% since 2006.”

She said a regulatory gap has emerged whereby solicitors were restricted from promoting their services, yet claims handling firms could do so with impunity.

Speaking later on RTÉ’s Morning Ireland, Ms Byron said that there had been a significant rise in promotion for personal injuries claims, particularly online.

“It is illegal for solicitors to advertise for personal injury claims, but what we see are claims companies emerging and sourcing this business.

“Obviously, they are sourcing it for somebody and these companies housed by solicitors who are not practising, or by lawyers who are not practising solicitors and claims handlers, these are not subject to that ban.”

The board also noted its concern that the volume of serious injuries occurring as a result of road traffic collisions is grossly understated. In a submission to the Road Safety Authority (RSA), the board highlighted an opportunity to enhance data sharing and classification between the board, the HSE, the gardaí, and the RSA.

Personal injury claims increased by 4.7% in 2012 and by 24% since 2007 according to an annual review for 2012 undertaken by the Injuries Board.

The board assesses personal injury claims and makes awards relating to motor, employer, and public liability accidents, without the need for litigation. The rise was driven by motor claims which increased by 6.7% in 2012 and by one third over the past five years.

Highlights of 2012

Compensation awards up 3.9% to €218m.

Average award in 2012 was €21,502.

Highest award was €697,495.

All claims up 4.7% in the year.

All claims up 24% since 2007.

Motor claims up 6.7% in the year.

Motor claims up 33.5% since 2007.

Serious road injuries grossly understated.