The Irish government announced this week that a committee would be established to look at reforming the personal injury claims sector. Businesses have closed down due to premiums doubling, and payouts on minor injuries are substantially higher in Ireland than in many other developed economies. As Insurance Edge has reported in the past, some insurers and brokers have withdrawn from the Irish market altogether.
Justice Minister Charlie Flanagan told the Irish Independent news site that ‘modest injuries should attract modest damages.’
The problem of sky high premiums for motor, business or public liability on events isn’t new in Ireland. But attempts by the industry to change things have made scant progress. Plans to set up an insurance claims database, funded by the industry and run by the Garda, were officially shelved last week after years of debate and planning.
A recent survey by Allianz found that 46 percent of people surveyed knew someone who had attempted insurance fraud. Politicians from both main parties have criticised a culture of compensation and an acceptance that insurance companies are ‘fair game’ by some consumers.
Allianz said that a ‘huge proportion’ of claims it contested in 2018 were fraudulent and the Alliance for Insurance Reform has been pushing hard for an Irish version of the IFED to be set up. Only by sharing data nationally, can fraudsters be traced and dealt with. However the latest decision by the Irish government is that any funds made available to combat fraud will be dished out across the various counties and regions of Ireland, rather than invested in a new unit based in Dublin.
Until the culture changes, honest policyholders in Ireland will continue to pay the price for political lethargy and an unwillingness by the criminal justice system to prosecute and jail potential insurance fraudsters, who simply try their luck knowing that there is no chance of them being prosecuted for making false statements.