Insurers are ‘dictating reform agenda’, committee hears

Insurers are being allowed to "dictate the reform agenda" in the industry without any evidence to support their arguments, a former chairwoman of the Personal Injuries Assessment Board (PIAB) has said.

Addressing the Joint Oireachtas Committee on Finance, Public Expenditure and Reform's hearings on the rising cost of motor insurance, Dorothea Dowling also said Ireland was currently suffering "reputational damage" and this represented a potential barrier to new entrants into the insurance market.

“From my unique expertise and experience of implementing successful reforms in this area, I am here solely in a personal capacity . . . [I am] concerned that insurers are being allowed to dictate the reform agenda without any empirical evidence to support their arguments,” she said.

“The available data actually points in a different direction.”

Ms Dowling said that if this had been allowed to happen in the Motor Insurance Advisory Board and when setting up PIAB, there would not have been a 40 per cent reduction in motor insurance costs in the decade up to the end of 2013.

“Instead it would have been a disaster,” she said.

“This has also happened in other jurisdictions, such as unsuccessful reforms in the UK and in some American states, where the most seriously injured were the biggest losers and any savings went to insurers rather than to policyholders.”

Consumer protection legislation

Separately, officials from the Competition and Consumer Protection Commission told the hearings on Thursday there was no evidence that consumer protection legislation had been broken by motor insurers through recent increases in premiums.

However, they expressed concern that recent statements from the motor insurance industry about price increases “may result in a degree of unspoken coordination which may breach competition law”.

The commission has already issued summonses to motor insurance providers compelling them to give evidence on such suspected breaches.

“We share the concerns of consumers, this committee and the Government about the rising cost of motor insurance,” it said in its submission.

“Our consumer helpline has received 1,466 queries since the middle of last year in relation to motor insurance, 227 of which relate to increasing motor insurance premiums specifically.”

In its own submission to the hearings, the Irish Brokers’ Association urged the Government to ensure the insurance market was attractive to new entrants and allowed for competition by “removing uncertainty and tackling the claims culture that currently exists”.

It said the powers of the Injuries Board should be increased to ensure fewer claims cases ended up before the courts.

The association also called for the Central Statistics Office to gather information regarding claims data, and for the co-ordination of existing databases holding claims data, penalty points and driving licence and NCT information.