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A government report from The Working Group on the cost of insurance in Ireland has found 'an overwhelming need to reform' the insurance sector. Among the findings in the 176-page report was data from the Central Statistics Office (CSO) indicating that motor insurance prices have increased by 51 per cent since January 2011, well in excess of EU trends.
The report recommends that there is greater transparency for consumers regarding how their insurance premiums are made up to give them ease at comparing policies. It also calls for the insurance companies to recognise driver history from jurisdictions outside the State, to give returning emigrants, for example, a better opportunity at being able to purchase insurance, a scenario that currently leaves many without the ability to do so.
One of the main reasons cited for rising insurance costs from the industry is the rising cost of claims and in particular awards for personal injuries. The Working Group recommended a strengthening of the Book of Quantum, a general guideline to the level of compensation awarded for personal injury, as well as judicial involvement in its compilation along with updates for it at a minimum of every three years. The establishment of a Personal Injury Claims Commission to examine best-practice processes in other jurisdictions is also called for. This will consider the different models of compensation that could be offered and examine 'care not cash' models that are used in other countries, which covers medial costs for recovery of injuries rather than lump sum financial payments.
A fully functioning database of to allow An Garda Síochána to check insurance compliance through Automatic Number Plate Recognition (ANPR) is to be finalised, with the rollout of such a database to be expedited. This includes a proposal to phase out the current paper-based insurance disc system.
Reaction from those in the insurance industry was tentatively positive. Speaking on behalf of Liberty insurance, Deirdre Ashe, Director of Personal Lines, said: "We welcome the publication of the Cost of Insurance Working Group's report, and are encouraged by the progress made to date. The recommendations and actions extend across a number of Government Departments and other bodies; it's important that all stakeholders fully commit to this process, which historically has not always been the case; only then can real progress be made, to the benefit of our customers. We will continue to work with Minister Eoghan Murphy and other representative bodies to effect reform and bring stability to the market".
A statement from Enterprise Rent-A-Car Ireland said: "Having actively participated in the consultation process with the Working Group and the Sub-Group on Claims, we fully support the Working Groups recommendations which aim to bring about more transparency in the insurance sector. We also broadly support the many individual recommendations put forward as a means of reforming the motor insurance sector.
As we are seeing on the ground, the rising cost of insurance is already beginning to impact on Ireland's tourist sector, of which car rental is an integral element.
We hope that the recommendations in this report are actioned to bring back some normality to the market without further delay."