People should be given incentives to settle insurance claims through the Personal Injuries Assessment Board (PIAB) in a bid to drive down the cost of insurance in the sector, Fine Gael Parliamentary Party Chairman Richard Bruton has said.
Deputy Bruton expressed concern in the Dáil today at the price of insurance costs due to the rising costs of litigation.
The Central Bank Report on motor insurance brings welcome transparency to the sector and will spur the debate on how to contain the cost to motorists.
Deputy Bruton said, “The key points to take away from the report are:
- The insurance industry is going through a purple patch for high margins, which have been well over double in the past four years than what they were in the previous five.
- Legal costs absorb over 10pc of what we pay in premiums, the same amount as company profits, while uninsured drivers cost another 3pc.
- Litigation is increasing. Only one in seven injury claims is now settled at the low-cost Personal Injury Assessment Board. On claims of over €30,000, three quarters of injury claims are going to litigation.
- In standard cases, litigation takes 40% of the final pot, but the evidence suggests that it results in no more benefit for the claimant than a PIAB award but takes twice as long to get an outcome.
“This improved transparency gives us all a better chance to understand how we can tackle this problem.
“A top priority must be to encourage more cases to go through the PIAB. That will bring down premiums and deliver a quicker and surer settlement to claimants.
“PIAB should be empowered to provide for early interim payments as an incentive to use their process,” Deputy Bruton said.