Insurers ‘refuse’ to hand over claims data

Irish insurance companies failed to provide a government group tasked with examining the spiralling cost of motor premiums with all the information it requested in order to finalise its report, a junior finance minister has claimed.

Eoghan Murphy, the junior finance minister who chaired the cost of motor insurance working group, said it had engaged with Insurance Ireland, the industry’s representative body, and individual insurers but had failed to obtain all the data it had sought.

Mr Murphy said Insurance Ireland expressed concerns in relation to data protection which may have prevented it supplying information. He added that communication with insurers would continue.

“We had a number of engagements with the insurance industry over the period and we engaged directly with Insurance Ireland but also with the individual companies as well. Those engagements were very helpful in terms of improving our understanding but we had difficulty getting data. At different points in time we sought different pieces of information. We published the information that we were able to get — where we could — but there were data protection concerns as well on the part of Insurance Ireland in terms of what they could pass over to us,” Mr Murphy said.

The insurance industry has been heavily criticised for failing to disclose data in relation to privately settled claims.

Motor premiums have risen by 70 per cent in the past two years.

About 20 per cent of insurance claims are processed through the personal injuries assessment board (PIAB) with a further 10 per cent settled through the courts. The working group struggled to gain access to information in relation to the remaining 70 per cent of claims.

Mr Murphy said it was impossible to fully understand the rising cost of motor insurance without that data but added that a national claims database would be established in an attempt to improve transparency on claims costs.

“It’s very difficult to get that information. We speak to that in certain sections of the [working group’s] report but the whole purpose of the national claims information database would be to get figures that we could trust that are publicly available, but they will be at an aggregate level.

“It’s [because of] the lack of transparency on that 70 per cent [that] we can’t be sure exactly what’s happening in the market as a result and we need to be able to get that transparency so we do have a proper understanding,” Mr Murphy said.

Kevin Thompson, chief executive of Insurance Ireland, said that the representative body had engaged extensively with the working group and that data protection was one of “many concerns” it had in relation to making information available.

Stuart Gilhooly, the president of the Law Society of Ireland, said insurers were unlikely to publish the data sought by the government’s working group. “I’m not confident that the insurers will ever give the information that the government or the [working] group wants because the insurers don’t want to get all that data out there because it will prove that the reason for insurance premium increases is in fact down to them and not down to claims costs,” Mr Gilhooly said.

Mr Murphy yesterday published 33 recommendations arising from the working group which aim to tackle the rising cost of motor insurance and are to be implemented by the end of 2018. In addition to the national claims information database, the group has recommended that a fraud database be established to address suspected fraudulent claims. Mr Murphy admitted it was not yet clear which body would have responsibility for the fraud database or how it would be funded.

A database of uninsured drivers will also be established while a personal injuries commission will be set up to benchmark settlement awards internationally.

Mr Murphy said there was “no silver bullet” to reduce the cost of insurance and added that he was unable to say if the recommendations would result in lower premiums for motorists.

Robert Troy, the Fianna Fail transport spokesman, urged the government to implement the recommendations as quickly as possible. “It has been suggested that it could take as long as 18 months before certain measures, such as the creation of detailed databases to combat fraud, are implemented. This indicates that the government simply is not giving this crisis the attention it needs,” Mr Troy said.

Insurance Ireland welcomed the report’s recommendations but stressed that priority must be given to policies that will reduce the cost of claims. The working group did not find that legal costs were a major contributory factor in the recent increase in premiums.

Insurance Ireland had previously claimed that legal costs were “leading to rising insurance premiums”. Mr Thompson said that legal costs accounted for €100 million worth of claims costs per year.