The insurance industry in Ireland has been proclaiming for a long time that compensation claims pay-outs are too large in order to justify their exorbitant premiums. They also maintain that exaggerated and fraudulent claims add significantly to the cost of motor and business insurance. The Legal profession have always maintained that the vast majority of claims are by no means exaggerated or fraudulent but are entirely genuine claims of accident victims.
According to High Court Judge Mr. Kevin Cross “The insurance industry is being fundamentally dishonest by claiming that our ‘compo culture’ is to blame for a rise in insurance premiums”. Judge Cross’s comments were endorsed by the Director General of the Law Society Ken Murphy who added the claim that ‘compo culture’ and fraudulent claims were responsible for the rise in insurance premiums was just incredible. Minster for Justice Charlie Flanagan was also highly sceptical of the assertions of the insurance industry. Minister Michael Darcy also spoke of his low level of trust in insurance companies.
The Report from the Central Bank
– December 2019 highlights that the cost of motor insurance claims fell by 2.5% between 2009-2018 but premiums rose by 42% in the same period. Even more remarkably the Report found that while the average cost of claims per policy over the last 5 years rose by 14%, average premiums rose by 62%.
The report also revealed that the insurance industry in Ireland generated an average operating profit of 9% last year, nearly twice the level of profitability in the UK.
The 17 general insurers in the Irish market made operating profits of €227 million in 2017, the latest date for which data is available. During the years 2013-2016 the level of increase in motor insurance premiums was a whopping 70% despite the fact that levels of damages for injuries are falling!
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