Compensation culture ‘on the wane’

IRELAND’S compensation culture is getting less, with the number of accident claims dipping by 20% in the first six months of this year, a lobbyist for cheaper insurance has revealed.

A clampdown on fraudulent claims, coupled with pressure from business and government, has spurred a dramatic fall-off in the number of people pursuing an accident claim, Barry English of the Alliance for Insurance Reform has said.

Mr English told the Waterford Chamber of Commerce's 'Succeed Against the Odds" seminar yesterday that although much had been achieved to stamp out fraudulent claims and reduce insurance costs, much more needed to be done.

"Business insurance has been referred to by some as like going to work every day with two anvils on your shoulders.

"It seems like extortion, like non-insurance because people tend to pay out a lot more in insurance than they ever will in claims. Others see it as daylight robbery. We always saw the US as litigious, but Ireland is the second most litigious country after the US."

As many as 40% of businesses which are members of the alliance borrowed to pay premiums last year. Most of their quotes doubled. Last year, 38,000 jobs were lost and insurance was seen as a major contributory factor. Such factors, as well as action by Supermac boss Pat McDonagh, led to the formation of the Alliance.

Much had been achieved.

The PDs had made insurance a key priority and there had been a 20% fall in the ratio of claims to accidents. The imminent formation of the Personal Injuries Assessment Board, due to get up and running next January, will also make a difference, Mr English said.

Changing attitudes among the judiciary, the ban on 'no-foal-no-fee' advertising as well as changing attitudes in the industry itself would also help reduce premiums in the future.

But much of the change would only come with pressure from the client.

Mr English urged businesses looking for quotes to shop around, try another broker if necessary. He said brokers within one town or city didn't always want to cut across one another. In such instances, quotes should be sought from elsewhere.

He also urged businesses to beware of a practice called blocking whereby a broker will talk himself out of a quote with several companies by blackening the name of a client and settling with the existing company, which may be offering the broker perks such as holidays or a bonus.

He urged businesses to meet their broker, ask about their accounts, not to be put off by jargon, to query reserves and to handle a claim like any other business transaction even if it meant going so far as to hire their own private investigator.