17 September 2021

Incident & Claims Analysis - Irish Insurance Industry

We analysed 1,000 claims over a 1 year period with some interesting results.

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Incident & Claims Analysis - Irish Insurance Industry

We analysed 1,000 claims over a 1 year period with some interesting results.

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Contact Derek Gately or Michael Whelan to find out about our claims handling service.

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25 March 2021

Personal Injuries Guidelines

How do awards levels in the new Personal Injuries Guidelines compare to the Personal Injuries Assessment Board’s (PIAB) Book of Quantum which the Guidelines replace?

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Personal Injuries Guidelines

On 6 March 2021 the Judicial Council met and adopted the “Personal Injuries Guidelines”.

Here we look at the new award levels in comparison to the Personal Injuries Assessment Board’s (PIAB) Book of Quantum which the new Guidelines replace.

There has being widespread media coverage since they were published, along with a lot of voices pushing for the insurance industry to reduce premiums going forward.

Minister McEntee brought the proposals to the Cabinet for approval and obtained agreement on Tuesday, 9 March 2021 for their implementation.

The next step is for the “Guidelines” to be formally enacted. This is going to be done via the Family Leave Bill 2021. Minister McEntee expects the new “Guidelines” to take effect within weeks.

Categories

There are 12 categories covered in the Guidelines, some of which were not covered in the previous Book of Quantum.

1. Injuries resulting in foreshortened life expectancy

2. Injuries involving paralysis

3. Head injuries

4. Psychiatric damage

5. Injuries affecting the senses

6. Injuries to internal organs

7. Orthopaedic injuries

8. Chronic pain

9. Facial injuries

10. Non-facial scarring and burns

11. Damage to hair

12. Dermatitis and other skin conditions

The following considerations will affect the level of the award

1. Age

2. Reduction or effect on life expectancy

3. Nature and duration of treatment – level of impairment

4. Impact on work

5. Interference with quality of life/on family

6. Psychological effects

7. Prognosis

Note, there are a number of new categories in the Guidelines such as Psychiatric Damage, Chronic Pain and Scarring and Burns.

What do the new Guidelines mean?

The new “Guidelines” will be adopted by the PIAB and the Courts.

When the Courts are making an award, brief submissions must be made as to where and within the relevant bracket the claimant’s injuries should fall. Based on the above, the Judge will make an award but where it departs from the Guidelines, they must state the reasons for such departure.

Based on the PIAB 2019 Annual Report, 88% of all PIAB awards were below €38,000.

Based on the Court Services 2019 Annual Report, the average Court award was €47,477.

Similar to the Book of Quantum, the new Guidelines split the majority of categories into 4 brackets:

1. Severe

2. Serious

3. Moderate

4. Minor

The new Guidelines provide much better figures in relation to serious injuries under each category.

The following is an analysis of the awards for various types of injuries comparing PIAB Book of Quantum in 2016 with the new Guidelines.

Analysis of injury awards by type
Analysis of injury awards by type

You will see from the above figures that most of the minor categories are down substantially, with the biggest difference in the minor ankle category being 63% lower than the previous top end figure.

It would appear the biggest reductions are at the lower end of each category.

Therefore, as the majority of PIAB awards are below €38,000 and the average Court award is just under €47,500, the majority of claims will fall within the lower end of each category and this is where the biggest reductions apply.

It will be interesting to see how these new guidelines are implemented and as we go forward a much clearer picture will be available as to where each injury falls, ultimately resulting in a cost saving as the value of each case will be known much earlier.

Michael Whelan

Head of Casualty

17 December 2020

Christmas Wishes for 2020

Wishing all of our clients and friends a very Happy Christmas and the very best for 2021. In lieu of Christmas cards, we have made a donation to Irish Guide Dogs for the Blind and Pieta House.

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Christmas Wishes for 2020

Wishing all of our clients and friends a very Happy Christmas and the very best for 2021.

In lieu of Christmas cards, we have made a donation to Irish Guide Dogs for the Blind and Pieta House.

Our offices will close on Wednesday 23 December at 1pm and reopen on Tuesday 29 December. All calls and emails will be monitored throughout this time.

From everyone at

Leeson Claims Services Ireland

10 December 2020

Action Plan for Insurance reform

On 8 December the Government published its first ever Action Plan for Insurance Reform. A sub-group have set about implementing the Action Plan and providing six-monthly progress reports.

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Action Plan for Insurance reform

On 8 December the Government published its first ever Action Plan for Insurance Reform.

A sub-group, comprising of a number of departments and the Central Bank, was set up in September to ensure a “whole-of-Government” approach.

The sub-group have set about implementing the Action Plan and six-monthly progress reports will be issued.

The main actions are:

  1. Commencement of the Consumer Insurance Contracts Act 2019. This commenced in September 2020 with the remaining sections to commence in September 2021
  2. To have the Judicial Counsel’s Personal Injuries Guidelines adopted by 31 July 2021
  3. Ensure that the courts shall have regard to the Personal Injuries Guidelines
  4. Enhance the PIAB through legislative proposals
  5. Review the Occupiers’ Liability Act 1995 in relation to the duty of care owed
  6. Recommend changes to reduce fraud to include making an exaggerated and/or false claims and to enact and commence the Perjury and Related Offences Bill 2018
  7. Review the Central Bank’s report on Differential Pricing in the Motor and Home Insurance Markets and take any appropriate actions

Conclusions

Taking the positives, you would say at least something is being done. This is an action plan for the coming years, so it will be interesting to see what additional changes are made over and above the Cost of Insurance Working Group’s previous reports.

The new Personal Injuries Guidelines from the Judicial Council is due to be published early next year and much seems to be hanging on these being the solution to a lot of problems. Unfortunately, until such time as the guidelines are produced, no one knows what effect they will have. A failure to significantly reduce awards will not be received well.

Next year is going to be an interesting year as it is expected claims numbers will be down due to COVID 19. It’s a case of wait and see as to how that plays out against forthcoming changes.


Michael Whelan

Head of Casualty

25 November 2020

Second National Claims Information Database (NCID)

The Central Bank (National Claims Information Database) Act 2018 commenced in January 2019. The first report has raised a lot of media coverage.

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Second National Claims Information Database (NCID)

Following on from Recommendation 11 within the Cost of Insurance Working Groups Report of January 2017, the Central Bank (National Claims Information Database) Act 2018 commenced in January 2019.

Private motor insurance was selected as the initial class of insurance in the scope of the NCID.

The legislation requires the Central Bank to publish a report on a yearly basis. The first report was issued in December 2019 and the second report was issued this month and can be viewed here.

The report has raised a lot of media coverage with the main focus being that insurers made profits of €142m, whilst the costs of settling claims reduced.

Part 1 – Trends in the Cost of Claims:

The key findings between 2009 and 2019 were:

  • the average cost of claims per policy reduced by 9%;
  • the average cost of injury claims per policy increased by 15%;
  • the average cost of damage claims per policy decreased by 43%;
  • claims frequency reduced by 45%; and
  • injury claims accounted for 7% of claim numbers but 74% of claims costs in 2019.

Part 2 – The Costs of Insurance Premiums:

The key findings between 2009 and 2019 were:

  • the average premium was 35% (€676) higher in 2019 than in 2009;
  • between 2009 and 2013 premiums decreased by 13%;
  • between 2013 and 2018 premiums increased by 63%; and
  • between 2018 and 2019 premiums decrease by 4%.

Part 3 – Comparison of Premiums and Claims Costs:

The key findings between 2009 and 2019 were:

  • the industry loss ratio averaged 72%;
  • it reached a high of 92% in 2014; and
  • it reached a low of 57% in 2017 & 2018.

Part 4 – Trends in the settlement of claims:

The key findings between 2015 and 2019 were:

  • between 2015 and 2019 half of all injury claims were settled directly;
  • in 2019 35% (33% in 2018) were settled through litigation, whilst this was 29% in 2015;
  • direct settlements averaged €13,427 with average legal costs of €1,397;
  • average injury claims settled through PIAB were €23,137, with average legal costs of €716; and
  • average injury claims settled through litigation were €46,214 with average legal costs of €23,409.

Part 5 – Income and expenditure:

The key finding for 2019 was the combined operating ratio (COR) in 2019 was 83%. The operating profit was 10% of total income.

Conclusion

Understandably, this report has piqued a lot of interest. Going forward, the Central Bank is the process of obtaining information in relation to liability claims with a view to providing a report related to that class of business.

It is interesting to note within the report that on average 90% of all claims fall below a settled cost of €100,000. However, within this category the average cost for a case settled through PIAB is €22,206 plus costs of €1,709, whilst a litigated case has an average of €23,807 with costs of €16,704. Therefore, whilst the actual settlement cost does not show much of a difference, the biggest issue is the legal costs attached to same.

Michael Whelan, Head of Casualty

02 September 2020

Personal Injuries Assessment Board 2019 Annual Report

The Personal Injuries Assessment Board 2019 Annual Report shows that 54% (53% in 2018) of all the awards made in 2019 were under €20,000 and 88% (87% in 2018) were under the value of €38,000

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Personal Injuries Assessment Board 2019 Annual Report

The Personal Injuries Assessment Board has issued its 2019 Annual Report.

The main points from the report are:

PIAB 2019 Annual Report main points
PIAB 2019 Annual Report main points

The report shows that 54% (53% in 2018) of all the awards made in 2019 were under €20,000 and 88% (87% in 2018) were under the value of €38,000.

The number of new applications has decreased by 6.8% and there continues to be little difference in the split between Motor/EL and PL. EL continues to increase from 12% to 13%, likely to be as a result of increased employment.

Whilst the number of awards issued has decreased, the number of awards that are accepted has increased slightly to 53% from 51.2% in 2018, continuing to mean approximately 1 in every 2 cases are released so proceedings can be issued!

In 2019, further progress was made with The Personal Injuries Assessment Board (Amendment) Act, which ultimately came into force on the 3rd of April 2019. The Judicial Council Bill will allow for a review of General Damages and create new guidelines going forward, ultimately replacing the Book of Quantum.

Overall, the average award has reduced slightly, this year by 3.2%. it will be interesting to see if once the Judicial Council issues its guidelines regarding general damages, as to the effect it will have on the average awards going forward.

Michael Whelan, Head of Casualty

31 July 2020

Courts Service Annual Report 2019 from a claims perspective

The Annual Report for 2019 from the Courts Service shows that the number of cases filed is down and the average award per jurisdiction is up significantly in the High Court.

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Courts Service Annual Report 2019 from a claims perspective

The Annual Report for 2019 from the Courts Service has been published.

Looking at Personal Injury cases, the figures are:

Courts Service Annual Report 2019: Personal Injury cases
Courts Service Annual Report 2019: Personal Injury cases

* Includes medical negligence awards

^ Exclusive of medical negligence awards

Of the cases where an award was made in the High Court^, 42% resulted in an award at or below €60,000 in 2019, compared to 36% in 2018.

In the Circuit Court, 34% of cases resulted in an award at or below €15,000 in 2019, compared to 36% in 2018. Finally, where an award was made in the District Court, 50% of cases resulted in an award at or below €7,500 in 2019, compared to 45% in 2018.

Court of Appeal

As of the 1st of January 2019, the Court of Appeal had 66 personal injury cases pending. Through the year, a total of 59 were received and 58 were concluded be it in or out of Court, leaving a total of 67 cases pending. There were 154 written judgments delivered in 2019, as against 176 in 2018.

The report shows that the number of cases lodged into the Courts Service has dropped slightly by 0.3%. The number of cases resolved in 2019 against 2018, be it by way of the Court or out of Court, has decreased at the same rate as previously i.e. by 0.69%.

It is evident that the new Court jurisdictions are starting to come through in relation to the courts which cases are lodged. There is a reduction in cases lodged in the High Court by 10.1% whilst the Circuit and District Court show an increase.

It is interesting to see, that the average award in the High Court (exclusive of medical negligence cases) has increased by 37.6%, but the average award in the Circuit and District Courts has decreased 2.1% and 0.9% respectively. The average awards would seem to be reverting back to the 2017 levels.

As stated last year, within 2019 there were a few large high profile medical negligence awards which is borne out in the average award rising drastically by 75.8%.

The report shows that the average cost of awards in the High Court increasing by 37.6%, which is a worrying trend. There was speculation after the 2018 report was issued that the Courts had recalibrated their awards due to the directions received from the Court of Appeal in relation to awards.

The key points of the report can be summarised as:

  • the number of cases filed is down;
  • the average award per jurisdiction is up significantly in the High Court and down slightly in the Circuit and District Court;
  • the number of claims being settled at the lower end of each jurisdiction scale has increased in the High and District Court but decreased in the Circuit Court; and
  • the overall average award is up by 18.9%^ compared with 2018 but still 20% on the average award in 2017.

Over the last few years there has been a large increase in the reporting of insurance matters within the media and it is interesting that the reduction seen last years in the average High Court awards has filtered down to the lower Courts. However, what is of concern is that the increase in the High Court average award in 2019 will have a knock on effect for the lower Courts, which might be borne out in next year’s report.

Michael Whelan, Head of Casualty
17 January 2020

2019 – A Year in Review

Highlights of the year include Brexit and its implications continuing to be a cause of concern and the Cost of Insurance Working Group (CIWG) continuing to issue their Quarterly Reports

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2019 – A Year in Review

Highlights of the year

  • Brexit and its implications continued to be a cause for concern.
  • Cost of Insurance Working Group (CIWG) continued to issue their Quarterly Reports
  • Central Bank (National Claims Information Database) Act 2018 came into effect on the 28th of January
  • Personal Injuries Assessment Board (Amendment) Act 2019 came into effect on the 3rd of April 2019
  • Judicial Council Bill was signed off on the 23rd of July 2019
  • Publication of the first report from regarding the National Claims Information Database (NCID).

January saw The Central Bank (National Claims Information Database) Act 2018 commencing on the 28th of January 2019. This will allow the Central Bank to gather data and publish reliable data going forward.

March saw the publication of the Eighth Progress Update Report of the Cost of Insurance Working Group (CIWG). It appeared to be very much a tidying up exercise as recommendations that were not capable of being completed for some time were marked off as completed.

April saw the introduction of the Personal Injuries Assessment Board (Amendment) Act 2019 coming into effect on the 3rd of April 2019 which gives greater powers to the PIAB to ensure all parties comply with the relevant legislation, with a view to a greater number of cases going through the PIAB process.

In May we saw one of the largest settlement awards in Ireland, which totalled €32.4m. Again, it showed the reluctance for plaintiffs to go down the Periodic Payment Order route. Further pressure was being placed on the and judges to get the Judicial Council Bill fast-tracked through the Dáil in advance of the summer recess.

July saw the publication of the Courts Service Annual Report. Overall, the number of Personal Injury cases were down 1.6% on 2017 (22,049:22,417). The average award, excluding medical negligence awards, was down 32.8% (€39,933:€59,482).

July also saw the publication of the PIAB’s Annual Report. New applications had risen slightly by 0.8% (33,371:33,114). Percentage of awards accepted was still only slightly in excess of 50%. The average award had reduced slightly by 0.92% (€24,879:€24,649).

July also saw the signing into law of the Judicial Council Bill on the 23rd of July. This will allow the Judges set about recalibrating of the Book of Quantum. At the time, ambitious views were that the first report would be issued by year end!

August saw the publication of the Ninth Quarter Progress Report from the CIWG. Again, this was tidying up on the work of the Board over the last number of years and emphasised the importance of the new legislation enacted in the first half of the year.

Late December saw the publication of the first report in respect of the National Claims Information Database (NCID). The report received a lot of media attention with the main focus on the fact that claims per policy reduced by 2.5% but the premium per policy increased by 42% in the same period.

The second half of the year saw a lot of media pressure on the Government to move forward so that the public could see action rather than talk in relation to the work of the CIWG. Many cases, such as the infamous “Swing-gate”, resulted in a lot of media coverage with the public calling into question the fairness of many claims and settlements.

In the wake of such public reaction, the Government has very recently stated if the reforms do not work they are open to holding a referendum in the context of bringing down the cost of public liability insurance for business and voluntary organisation.

What’s around the corner for 2020?

  • Further update reports from the Cost of Insurance Working Group, dealing with the outstanding action points.
  • A report from the Committee set up in accordance with the Judicial Council Bill 2019 dealing with Guidelines for General Damages.
  • The enactment of the Consumer Insurance Contracts Bill and the effects it will have with regard to handling claims.
  • Brexit - what effect the deal will have on the insurance industry as a whole, if it is agreed.

Michael Whelan, Head of Casualty

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