Arid Environment

Companies say liability insurance premiums have increased despite reforms

Premiums for liability insurance for businesses, sports organizations and charities have increased by 16% despite new rules designed to reduce the level and amount of claims.

The Alliance for Insurance Reform published the results of a survey of its members yesterday to mark the one-year anniversary of the implementation of new Judicial Guidelines for personal injury awards. The alliance said the results show clearly that the benefits of the new guidelines were not being passed on to policyholders.

Peter Boland, Director of the Alliance said personal injury damages remained the biggest component of the cost of insurance and the Judicial Guidelines implemented on 24th April 2021 introduced significant reductions in the level of damages for minor injuries.

“Our ongoing research shows liability insurance renewal trending at +16% and the research we carried out over the last three weeks shows that 73% of organizations have also had additional excesses or exclusions imposed on their policies since 2019,” Mr Boland said.

“Insurers are simply not passing on the benefits of recent reforms to liability insurance policyholders. Equally, other reforms that would impact on liability premiums are not happening fast enough.”

“While they are having an impact on motor premiums, they are clearly not having an impact on the liability premiums paid by businesses, voluntary and community groups, sports and cultural organizations and charities.”

Eoin McCambridge, Managing Director of McCambridge’s of Galway and Director of the Alliance said to restore policyholders’ faith in the process, the Government must do everything in their power to make sure incumbent insurers pass on the benefits of reforms.

“They must move quicker on getting additional competition into the market,” he said. “They must speed up promised reforms. In particular, they must now deliver very quickly on the delayed rebalancing of the duty of care and the delayed reform of PIAB. Ultimately they must get liability insurance premiums down to affordable levels with reforms that keep them that way.”

In response to the survey, Insurance Ireland, the representative body for insurers, said liability insurance has been and remains a challenging area due to the volatility and unpredictability of the personal claims environment.

“The reduction of the level of awards and their volatility can reduce risk and uncertainty in the Irish employers’ liability/public liability market, if the guidelines are consistently applied,” they said in a statement. “The significantly lower acceptance levels of the awards by claimsants are concerning and the worry with the lower acceptance rate is that more cases will go to litigation.”

Insurance Ireland said that for the success of insurance reform, it will be essential that the cases are heard quickly and that the courts confirm the guidelines in their procedures. They also highlighted the importance of implementing related measures such as rebalancing the duty of care and strengthening protections in the Occupiers’ Liability Act.

“A more stable sector, delivered through Government reform, will reduce market volatility and bring more certainty for customers, businesses, and insurers alike and support increased competitiveness of the market.”

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