‘No justification’ for rise in insurance premiums

There is no justification for increases in insurance premiums as accident rates in Ireland remained stable in 2013, the head of the Injuries Board has declared.

Patricia Byron, chief executive of the Injuries Board, claimed there was no basis for any increase in the cost of motor, public liability or employer’s liability insurance as the cost of processing claims had fallen from 8.7% to 7.3% of the overall value of awards in 2013.

In its latest annual review, the Injuries Board reported that it had paid out 243.5m in compensation for personal injuries last year — up from €218m in 2012, an 11.7% increase.

The board attributed the increase to a number of exceptionally high-value awards, with over 100 claims attracting awards exceeding €100,000. However, it also stated that a higher proportion of claims are being processed through its lower-cost, non-adversarial process instead of the courts.

The board made 10,656 personal injury awards in 2013 — an annual increase of just over 5%.

The number of new claims submitted last year also rose by over 1,700 to 31,311.

Ms Byron said the board’s non-adversarial model had delivered direct savings of more than €72m in 2013 and approximately €1 billion since its establishment 10 years ago.

She also stressed that the savings only related to processing and administrative efficiencies as the awards made by the Injuries Board remain on par with awards handed down by the courts.

Ms Byron said the cost of processing personal injury claims was now at historically low levels as the board’s processing fee for respondents, mostly insurance companies, was reduced from €850 to €600 last year. The charge for a direct claimant is a refundable fee of €45.

Looking ahead, Ms Byron said there was no evidence of increased accident numbers, although the board expects to see a continuation of the trend whereby a smaller proportion of claims are processed through the courts.

She claimed such a trend should mitigate against any hikes in insurance premiums.

New figures show the average award made by the Injuries Board in 2013 was €22,847 — up from €21,502 in 2012.

The board made its highest ever compensation award last year with one claimant receiving a payout of €1.39m. Ms Byron said the cost of processing the claim was just €6,000, or 0.5% of the total award, compared to typical litigation costs which would equate to 58% of the claim.

Three-quarters of all claims last year related to injuries suffered in road traffic accidents, while accidents in public places accounted for 17% of the total and workplace accidents for 8%.

Limerick has the highest claims for personal injuries of the 26 counties in the Republic, accounting for 7.6% of all claims but just under 4.2% of the population. Other counties with disproportionately high claims levels are Longford, Louth, Dublin and Carlow.

In contrast, Kilkenny has the lowest claims rate of any county, while Wicklow, Wexford, Roscommon and Leitrim also have proportionally low claims levels.

The average time for processing a claim last year was just over seven months.