Insurance claims database not likely before 2019, Minister says

Government criticised at Oireachtas committee for not grasping ‘gravity’ of high premiums

Minister of State at the Department of Finance Michael D’Arcy  chairs the Cost of Insurance Working Group. Photograph: Dara Mac Donaill/The Irish Times.

Minister of State at the Department of Finance Michael D’Arcy chairs the Cost of Insurance Working Group. Photograph: Dara Mac Donaill/The Irish Times.

 

A national database tracking insurance claims is unlikely to be established until next year, an Oireachtas Committee has heard.

The database is designed to develop an understanding of how the cost of claims is affecting motor insurance premiums and is part of an overall strategy aimed at tackling spiralling costs.

Legislation to allow for its creation is in train but Minister of State at the Department of Finance Michael D’Arcy, who chairs the ongoing Cost of Insurance Working Group (CIWG), said the database would not be operational this year.

Mr D’Arcy was facing questions before the Oireachtas Finance Committee on the progress of various measures to address concerns over insurance costs, many of which have been outlined as recommendations in two reports published by his working group.

Sinn Féin Senator Rose Conway-Walsh told Mr D’Arcy there had been a lot of input on the issues but “no real outcome for people”.

She gave the example of an 18-year-old quoted €6,785 for motor insurance on a 2004 Ford Fiesta, and a business whose €20,000 policy in 2015 had since risen to €102,000.

“[Insurers] are still getting away with this crazy, crazy situation,” she said, adding that she was concerned the Minister “didn’t understand the gravity of it”.

Mr D’Arcy asked her not to make such statements.

Calculated

Under questioning from Sinn Féin’s Pearse Doherty, Mr D’Arcy said Ireland had a high awards environment for claims and that often companies took a calculated move to settle rather than litigate.

“It’s cheaper to settle, whether a claim is legitimate or not, than it is to go through the courts process,” he said.

He later pointed out that, according to Central Statistics Office (CSO) data, motor insurance premium cotss had fallen by 20 per cent since peaking in 2016.

He said the Government was aware that insurance costs were having a serious impact on businesses and that some premiums were “very difficult to justify”. However, he said there was “no silver bullet” to the problem.

His working group has been meeting since 2016 and has issued two reports - one dealing with motor insurance and the other relating to employer and public liability cover.

“I understand why many believe that the pace of reform is not sufficiently quick,” he said. “While I am not unsympathetic to this view, it is important to point out that there is a lot of work being done.”

Transparency

Much of the focus of the working group has been around the lack of transparency in the sector generally, consumer protection issues, tackling fraud and reducing the cost of the claims process.

It has asked the Law Reform Commission to examine whether it would be legally and constitutionally possible for the Oireachtas to legislate to cap the amount of damages a court can award in respect of a personal injury claim.

Mr D’Arcy added that the working group’s report on employer and public liability insurance also references the need for training in assessing injury cases.

“What we are seeking here is to ensure that the judiciary have access to appropriate training through a proposed amendment to the Judicial Council Bill and through other training mechanisms already in place,” he said.