Average awards for personal injuries have fallen by 50% since revised guidelines on the calculation of the awards were introduced, the Tánaiste has said.
The data was supplied by the Personal Injuries Assessment Board (PIAB) and represents a further decrease on the average 40% reduction seen in the first five months after they came into effect last April.
“We have seen some evidence that our plans so far are working – PIAB data shows the average award has decreased by approximately 50%,” said Mr Varadkar has he launched the Government’s second implementation report of its insurance reform plan.
“Data from the Central Bank shows the average cost of claim for motor insurance policies have decreased by 20%.”
“But we know more needs to be done to reduce costs for individuals, businesses and volunteer groups.”
Mr Varadkar said the focus this year will be on legislative reforms in the area of occupier’s liability, competition enforcement and PIAB.
“The Insurance (Miscellaneous Provisions) Bill will also be progressed. We will continue to monitor costs to make sure the changes we are making are reflected in premium reductions,” he claimed.
In total the Government claims 80% of the actions in the plan have now been delivered, with the other already initiated.
However, Insurance Ireland said despite the progress, important step change reforms, including the rebalancing of the Duty of Care, have yet to be introduced.
It also said that while new personal injuries guidelines have been implemented, uncertainty remains due to legal challenges to their application.
The industry body also said changes to the Occupier’s Liability Act need to be expedited.
“We firmly believe that rebalancing the duty of care applied to policyholders is an essential part of the reform agenda and ensuring that it is practical and proportionate for businesses, claimants and consumers and work on progressing this review should be accelerated and we look forward to working with government to progressing these reforms,” said Moyagh Murdock, chief executive of Insurance Ireland.
Meanwhile, Jonathan Hehir, managing director of CFM Group predicted that the reduction in personal injury claim awards will lead to new entrants to the business insurance market.
“The recent reduction in Irish claims awards is being discussed in the international insurance community and we could be hopeful that at least one new insurer will enter the Irish insurance market to serve businesses plagued a dearth of competition due to Ireland’s reputation as a country with excessive claim costs,” he said.