New insurance guidelines will see reduction in cost of insurance later this year

The Junior Finance Minister has been meeting with insurers to outline the importance of a reduction in premiums.
New insurance guidelines will see reduction in cost of insurance later this year

Minister Sean Fleming says insurers have indicated they plan to reduce premiums.

Businesses and motorists should see a reduction in their insurance premiums in the second half of the year.

It's after new guidelines aimed at reducing personal injury payouts were approved last month.

The Junior Finance Minister has been meeting with insurers to outline the importance of a reduction in premiums.

It is after the Judicial Council last month approved guidelines that will mean pay-outs for personal injury claims will be significantly reduced.

Minister Sean Fleming says insurers have indicated they plan to reduce premiums.

"The cost to the insurance companies will now go down and that should be passed on to the public," said Mr Fleming 

"They have all said they will start doing it early in the second half of this year, after June."

Peter Boland from the Alliance for Insurance Reform says it is vital that businesses see a drop in their public liability insurance premiums.

"Sectors such as hospitality, leisure, transport, they will not be able to function properly after Covid has been resolved unless insurance has been sorted in the meantime," said Mr Boland.

Currently pay outs for personal injury claims in Ireland are on average 4.5 times higher than similar claims in England and Wales.

The CEO of Insurance Ireland, Moyagh Murdock has defended the delay in passing on a reduction in motor insurance premiums to customers, pointing out that the new guidelines on insurance awards have not yet had an impact on court cases in the system.

Ms Murdock said she welcomed the new guidelines on insurance payouts which “bodes well” for reduced awards for soft tissue injuries.

It will take some time for cases to be “flushed through the system” she told RTÉ radio’s News at One.

Ms Murdock said it was important to point out that the cost of premiums was already coming down in the past 18 months with a reduction of 9% at the end of 2019, a further 6.5% in 2020, and they continue to fall in 2021.

Claims were only one element in terms of the cost of insurance premiums, she added. The new guidelines should also reduce the need for litigation, she said. There had been €56 million in refunds in 2020.

Ms Murdock pointed out that traffic volumes had not been as low in the most recent lockdown as they had been this time last year and that would have to be taken into account.

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