The Irish Times view on insurance costs: the figures don’t add up

Insurance reform has been on the agenda since the early 2000s but the various parties keep looking elsewhere to lay blame

When it comes to insurance, increasingly the figures just don't add up. Last week three senior insurance executives claimed before an Oireachtas committee that up to one in five claims they processed involved fraud or exaggeration. Yet, as Sinn Féin finance spokesman Pearse Doherty pointed out, each of three companies before the finance committee have reported only around one per cent of claims to the Garda.

Either their own figures are less than strictly accurate, Doherty said, or they are not reporting them because it was not worth the bother. His comments came against a background where the industry has recently reported a strong rise in profits. For their part, insurance companies insist that if the cost of claims and awards falls, insurance premiums would do likewise. Data from the Courts Service annual report shows that costs are indeed falling. Its figures show there was a 29 per cent drop in the aggregate value of awards made in insurance cases last year, excluding medical negligence cases.

Insurance reform has been on the agenda since the early 2000s but the various parties keep looking elsewhere to lay blame. It is surely time to stop shifting the target. The companies need to monitor and pursue more actively fraud and exaggeration. The legal system also needs to play its part. The Judicial Council will, in time, introduce new personal injuries guidelines. But, with legislation still not signed into law, that is close to two and a half years away at best .

In the meantime, lawyers must be more discerning in the business they pursue, as Judge Jacqueline Linnane stated in the Circuit Civil Court yesterday when dismissing five fraudulent damages claims seeking up to €300,000 for whiplash injuries. And judges themselves need to recognise the import of recent rulings by the Court of Appeal.

These are binding on lower courts, so they should be pushing down the size of awards for minor to moderate injuries. The evidence from the district and circuit courts last year is that this has yet to happen – at least on a consistent basis.