Editorials

The Irish Times view on insurance premiums: a load of hot air

The fiction that one can do better financiallyby by bypassing PIAB is propagated by vested interests

The spike in PIAB award rejections comes as a series of High Court cases challenging the constitutionality of laws underpinning the judicial guidelines make their way through the courts. Photograph: Alan Betson

Tue Apr 12 2022 - 20:47

Promises by insurers in the Republic that they would move rapidly to cut motor premiums as a result of new judicial guidelines for personal injury awards would appear, on the face of it, to have been a load of hot air. The average award from the Personal Injuries Assessment Board (PIAB) dropped by 42 per cent from the adoption of the new guidelines by the Judicial Council last April and the end of the year, a report from the board shows. However, data from the Central Statistics Office (CSO) indicate that motor insurance costs for consumers fell by just 8.6 per cent last year.

The devil is in the detail. The PIAB report highlighted that just 37 of the awards it had put forward were accepted last year. That’s down from a traditional level of about 50 per cent. The spike in rejections last year, mainly by claimants believing they could get more by taking their case to court, is a worrying development – especially when the guidelines, set by judges, are supposed to do away with any notion that someone could do better by essentially bypassing PIAB. There are vested interests in propagating this fiction.

There is a real need for data on awards coming through the courts system and figures from insurers on the levels at which they are settling cases

Central Bank figures have consistently shown in recent years that even before the judicial guidelines, most claimants gained very little financially – and only lost time – by taking the legal route.

The spike in PIAB award rejections comes as a series of High Court cases challenging the constitutionality of laws underpinning the judicial guidelines make their way through the courts. A hearing of the lead challenge concluded last Friday, with a judgment expected in the coming months. The sooner, the better. And there is a real need for data on awards coming through the courts system and figures from insurers on the levels at which they are settling cases.

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CSO figures suggest that motor coverage costs have come down by about 40 per cent since 2016, following a 70 per cent spike in the three years before then as the industry raced to recover from a period of massive losses. But Irish insurers’ motor profits have only been going one way. There’s plenty in the tank to pass on to consumers.

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