Irish Examiner view: A lot of expectations put on new insurance guidelines

Guidelines should see the level of damages awarded in personal injury cases reduce by 40% to 50% but anticipated premium reductions may not materialise

Justice Minister Helen McEntee has called on the insurance industry to bring down the cost of premiums as new personal injury guidelines are due to come in to effect. Picture: Sam Boal/Rollingnews.ie

There appears to be agreement at official level that a new set of guidelines on personal injuries will reduce awards in general and, in turn, cut insurance premiums. 

The question is whether such dual expectations are justified.

Approved by the Judicial Council last month, the guidelines will come into effect on April 24 and will be used by both the Personal Injuries Assessment Board (PIAB) and the courts to assess compensation. 

They are intended to reduce the amounts that can be awarded for many categories of injury.

PIAB chief executive Rosalind Carroll said that the guidelines should see the level of damages awarded in personal injury cases reduce by 40% to 50%. 

At the same time, Insurance Ireland CEO Moyagh Murdock said she would be "optimistic" that consumers would start to see a reduction in their motor insurance premiums "in the near future".

Justice Minister Helen McEntee said the guidelines should reduce costs and, in time, boost competition in the Irish insurance market. 

It is now important that the insurance industry follows through and brings down the cost of insurance.

Those pronouncements sound positive, but they also appear aspirational and maybe a little optimistic. 

The same arguments were made when the PIAB was set up in 2003, but personal injury awards never reduced to the level anticipated; as a result, neither did insurance premiums.