Minister of State with responsibility for insurance Seán Fleming has called on insurers to pass on the savings they have made as a result of government reforms to consumers.
Speaking at the Insurance Ireland-PwC leaders survey breakfast event on Wednesday, Fleming said insurers needed to reduce premiums in line with the financial benefits they had seen from the introduction of Personal Injuries Guidelines by the Judicial Council to replace the Book of Quantum.
Average awards granted by PIAB following the enactment of the new guidelines in April 2021 came to €13,800, or some €10,000 lower than the 2020 average of €23,900. Claim applications across motoring (-31%), public liability (-27%) and employer liability (-28%) all fell significantly as well.
"Our current focus is now firmly on completing the reform agenda within the next few months, particularly in principal action areas such as reforming duty of care legislation, and strengthening the Personal Injuries Assessment Board," Fleming told event attendees.
"The Cabinet Committee Sub-Group on Insurance Reform oversees the implementation of the ambitious Action Plan for Insurance Reform. I am pleased to report that the vast bulk of the actions are implemented and I expect the major outstanding reforms to be completed this year.
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"These reforms have been sought by industry and the government has delivered. It is now important the savings and benefits generated from these reforms are passed on to the public."
Fleming cited CSO data that motor insurance prices had fallen 10% this year and 43% since their peak in July 2016 despite inflation running at 8.2% at present, and said he was confident that the impact of the Personal Injuries Guidelines and other reforms were beginning reflect in lower car insurance premiums.
He shared concern, however, at the rising cost of home insurance and the difficulty small, niche businesses face in securing cover since Brexit caused a number of specialist UK insurers to flee the Irish market.
"Such small sectors, particularly those deemed to be higher risk, need to find ways to co-operate more in a small market. But it is also incumbent on the industry to broaden its risk appetite to these group schemes to offer affordable insurance cover," Fleming said.
Research released by Insurance Ireland and PwC on Wednesday showed that 61% of insurance leaders said cost pressures were the greatest issue for their business, more than triple the 19% that said so last year.
Retention of key talent (47%) and cost of insurance claims (36%) were also cited by a large proportion of insurance leaders as their biggest difficulty, but 83% expressed confidence about business growth in the coming year.
They also have ambitious hiring plans with six out of ten planning to increase headcount in the year ahead, up from 54% last year.
The single key government priority, as seen by Irish insurance leaders, is ensuring that Ireland remains competitive in the face of rising costs (86%, up from 51% last year).
Other key priorities for government include ensuring the availability of key skills (54%, up from 23% last year) and continuing to address the cost of claims (45%, up from 34% last year).
John O’Leary, leader of PwC Ireland's insurance practice, said: “Despite economic uncertainties, Irish insurers are confident about growth prospects in the year ahead.
"The survey points to a resilient insurance industry which has come through the tests of Covid-19 remarkably well while investing in priority areas. Steady progress is also being made in a number of critical areas such as digital transformation and climate change. However, cost pressures and the availability and retention of key talent have increased dramatically.
“The volatility surrounding the macroeconomic climate makes it even more important for insurers to conduct robust scenario modelling as they refresh their strategies. Insurers should protect their business from both financial and non-financial risks and ensure that their strategic decision making and risk management processes are fit for purpose.”
Moyagh Murdock, CEO of Insurance Ireland, added: "Insurance leaders are aware that they must do everything they can to bring innovation to their businesses and leverage technology to gain efficiencies in a consumer-driven world," she said.
"In this regard, it bodes well for both consumer and the industry to see the strong focus on digital transformation in this year’s survey with most insurers developing plans to leverage automation and AI technology to enhance products and services for customers."
Insurance Ireland and PwC undertook the survey in September, with 37 participants among Ireland's leading insurers taking part. The sample included 40% international-only insurers, 32% domestic-only insurers, and 28% international and domestic insurers.
(Pic: Getty Images)
