People making injury claims were less likely to go to the Personal Injuries Resolution Board (PIRB) and more inclined to go to court in 2022, according to a new report from the Central Bank.
It found that 16pc of claimants settled directly with insurers, 10pc before involvement by the PIRB and 6pc after it got involved. These proportions were down from 2019, when 25pc of claimants went through the independent body, then known as the Personal Injuries Assessment Board (PIAB).
By contrast, almost three-quarters of all claimants (73pc) settled through litigation in 2022. This was split between 70pc who settled with their insurer before a court award, and 3pc who settled with an award.
“The proportions of litigated claims have increased overall from their 2019 values, when they were 58pc and 4pc respectively,” according to the bank’s third report on employers’ liability, public liability and commercial property insurance.
Only 2pc of the litigated cases in 2022 were settled under new personal injury guidelines introduced the previous year by the Judicial Council.
Inflation rose to 8.2pc in 2022, partly due to the Russian invasion of Ukraine and volatility in the energy market. This had an impact on the insurance sector that year, with higher costs for building materials leading to an increase in the cost of some claims.
Moyagh Murdock, CEO of Insurance Ireland, said the report suggested a more stable market environment following a long period of loss making in these segments, with an overall 0.5pc level of profitability between 2009 and 2022.
“Nonetheless, this market segment remains very challenging in retaining existing providers and attracting new entrants into Ireland. In contrast, the motor insurance market has seen two new entrants into the market in the past 12 months,” she said.
The Alliance for Insurance Reform noted that insurance company profit margins grew by 55pc in the 12 months covered, from 9pc in 2021 to 14pc in 2022. Meanwhile, insurance premiums for liability cover increased by 8pc in 2022.
Flora Crowe, an alliance board member, said: “This report proves what we already know – despite all the reforms the Government introduced, and despite the decrease in the volume and cost of claims, our insurance premiums continue to rise.”
Hazel Rock, head of insurance services at Brokers Ireland, said legal expenses continue to represent a substantial portion of the total settlement costs.
Minister of State for Trade Dara Calleary said new changes in relation to claims are still taking effect and that is why premiums are yet to come down in cost.
“The Injuries Resolution Board can now offer mediation. This is the first time this has been available. It has been available since mid December,” the minister told RTÉ Radio One’s Morning Ireland.
“To date 40pc of claimants are taking up the option of mediation. That will take the adversarial nature away from it. That should reduce our legal costs, legal cost are deemed to be a major challenge,” he added.
While figures show that the majority of people are not choosing the new mediation option available, Minister Calleary said the option needed to be promoted so the public knew it was available.
“With the new functions with mediation, and with the new powers that we have given us under legislation, the Injuries Resolution Board will be engaging in a major PR campaign this year,” Mr Calleary said.
“What I would say to people is if you are in the unfortunate position of having a need for a claim, you will get that claim resolved within two and a half years with the injuries resolution board at a much lower cost,” he added.
Mr Calleary said while new guidelines on claims are “changing the dial” in terms of court awards from claims, there needed to be more transparency around claims that are settled out of court.
“I regularly hear from businesses who hear that a case has been settled by the form of an increased premium that has to stop and there has to be greater transparency around that process,” the minister said.
