Review of 2018 from a Claims Perspective

Highlights of the year

·        Brexit and its implications continued to be a cause for concern.

·        Cost of Insurance Working Group (CIWG) continue to issue their Quarterly Reports

·        2nd and Final Personal Injuries Commission (PIC) Report issued

·        Draft legislation for the National Claims Information Database (NCID) issued

·        Decision not to proceed with a Claim-by-Claim Register.

·        PPO’s came into effect from the 1st of October.

January started off with the publication of the CIWG’s 1st Report on the Cost of Employer and Public Liability Insurance. The main aspects related to the need to improve transparency, improving the personal injury litigation framework and reviewing the level of damages.

February saw the publication of the CIWG’s 4th Quarter Progress report. Further sub-group reports awaited meaning any effect on the claim's environment would not be seen until the year end.

April brought the annual publication of the Personal Injuries Assessment Board’s (PIAB) annual statistics for 2017. Significant points included a decline in new claims received and the average award increasing from €24,305 in 2016 to €24,879 in 2017.

May saw the publication of the CIWG’s 5th Quarter Progress Report. This report combined both the Working Group's Motor and EL/PL recommendations. It was stated that 80% of the recommendations had been completed at this stage.

The month also saw the publication of the 2nd Motor Insurance Key Information Report. This provided the first set of factual data to be provided by Insurance Ireland. The data scope was from 2011 to 2016. It showed that the cost of a Third Party Injury claim at a much higher average cost per policy (€43,179) as against the average motor award made by the PIAB of €22,454. The collating of such data greatly assisted in setting the data to be captured for the NCID.

One recommendation with the CIWG’s report was the setting up a new Garda Unit to investigate insurance fraudsters. Concerns around how the unit's cost would be covered was resolved in July when it was agreed that it would be funded by the insurance companies.

July also saw the largest settlement for a PI claim in Ireland in the amount of €17.2m.

We saw the publication of the Central Bank (National Claims information Database) Bill which allows the Central Bank to obtain and provide a complete set of verified/reliable industry wide data.

July also saw new legislation going through the Oireachtas to create a bail-out fund to be based on a contribution or levy, of 2pc of the value of gross written motor premiums. This ultimately came into force from the 1st of December 2018.

August saw the publication of the Courts Service Annual Report for 2017. Overall, there was an increase of 2.4% on the total number of cases lodged in the High/Circuit/District Court over 2016. Excluding medical negligence cases, the average award in the High Court was down 2.97%, average award in the Circuit Court was up 4.3% and the average award in the District Court was down 1.5%.

August also saw the publication of the PIAB 2017 Annual Report which showed that new applications were down 2.8%. The average award has increased 2.4% to €24,879 whilst the number of awards to acceptance remained at 54%.

September brought with it the publication of the CIWG’s 6th Quarterly Progress Report. It stated that 82% of the recommendations had been completed. The CIWG had received the PIC Report and confirmed it would be made public later in the month.

September saw the biggest step forward in relation to the work of the CIWG’s recommendations being the publication of the PIC’s 2nd and Final Report which contained 10 further recommendations. The main recommendations were to ensure the Judicial Council Bill was enacted where guidelines regarding damages would be drafted, cash for care was found not to be an option, insurer’s to invest further in fraud and to agree an internationally recognised coding system.

In October the report on the feasibility of an Insurance Claim-by-Claim Register was issued. The sub-group did not believe that there was “necessity” and “proportionality” to consider the “effectiveness” of such a register. It was found that it would provide limited added value and therefore, at this time, a claim-by claim register will not be pursued.

As a recommended by the PIC, the PIAB issued whiplash data in November. This showed whiplash injuries were 4.4 time higher in Ireland than England and Wales and 70.8% of all PI motor cases related to whiplash. The average whiplash injury claim was €18,851 and 88% of whiplash awards were under €30,000.

November also brought about the CIWG’s 7th Quarterly Progress Report. This showed that we were at a stage where legislative measures needed to be put in place in order for the relevant recommendations to bear some “fruit”. The main piece of legislation related to the Judicial Council Bill, as it was recommended that the Judicial Council, once up and running, would provide guidelines in relation to general damages which would be internationally benchmarked.

What’s around the corner for 2019?:

·        Further implementation of the actions within the Cost of Insurance Working Group.

·        Ensuring the relevant legislation is moved through the houses i.e. Judicial Council Bill, PIAB Amendment Act, Central Bank (National Claims Information Database) Bill

·        Establishment of the Office of the Legal Costs Adjudicator

·        Brexit - the fear as to what a deal or no deal will have on the insurance industry as a whole.

Michael Whelan

Head of Claims

DRM Claims Services

Email: [email protected]

PH: 00 353 1 676 000 3          

December 2018