Michael D’Arcy: Award amounts driving premiums up
The minister tasked with reforming the insurance industry has defended his work to date amid angry Oireachtas exchanges — and said premiums are high because of the amounts awarded in compensation.
At a combative hearing of the Oireachtas Finance Committee, Michael D’Arcy hit back at accusations that little had been done since the Cost of Insurance Working Group (CIWG) issued a report on motor and public liability insurance costs.
Mr D’Arcy said that fraudulent and exaggerated claims are pushing up the costs of doing business, which is being passed onto customers.
He said the range of payouts — as set out by the Book of Quantum — are up to five times as much as comparable awards in the UK.
“If somebody is getting five thousand in the UK, they’re getting 25,000 here,” the minister of state told the committee.
“It’s tax-free, and it’s very lucrative. So even the best of people, who have been impacted through no fault of their own, will pursue a case because the Book of Quantum is at the level, the threshold that it is at.
“That’s why this market is not competitive, that’s why you don’t have 15 or 20 insurers in this market.”
Sinn Féin finance spokesman Pearse Doherty said consumers were being “fleeced” by a market which is operating “like a cartel.”
Mr D’Arcy said Mr Doherty was ignoring figures from the CSO that indicate that premiums have reduced by 23% since peaking in July 2016.
He also said the problems were multifaceted.
“I don’t have a magic wand to instruct the guards, the DPP, the Courts Service, the Central Bank, the State Claims Agency, PIAB [Personal Injuries Assessment Board], and the other departments within the sector,” he said.
“It’s a big, broad sector deputy and we’re moving in the right direction.”
Senator Rose Conway Walsh said it was “unimaginable they won’t even tell people when a claim is made against them”, to which Mr D’Arcy fired back in a bad-tempered exchange.
“I have five other pieces of legislation far more important than that,” he said.
“This is a very small issue you are talking about… if you think this is the big stuff, senator, you don’t know what you are talking about.”
Meanwhile, an insurance industry spokesman said fraudulent road traffic accident claims are costing companies an estimated €90m a year.
Cyril Moloney, on behalf of Allianz Ireland, was speaking after a Latvian national, described by a judge as “a liar” and a man not to be trusted, had lost a €60,000 damages claim for injuries he allegedly suffered in a road traffic accident.
