Insurance news, views and article snips

Liam McPoyle

Obviously the price of insurance is a pretty hot topic at the moment so I thought it might be an interesting topic whereby people can post various articles they come across, be they factual or opinion pieces.

I'll start the ball rolling with a couple Ive seen over the last few days.

Motor insurance woes set to drive many of us round the bend.

If your policy is due to be renewed, you may well be whacked with a big rise in the premium.

The Central Bank of Ireland yesterday brought us further evidence of the woes of the Irish motor insurance industry.
<snip>

Source.

Makes for some worrying reading. Aviva went through massive restructuring 4 or 5 years ago with a large raft of voluntary redundancies and they are only now turning a corner, albeit a small one. FBD's problems were well documented last year, as were 123.ie / RSA.

The most surprising results for me personally were that of Allianz. They have traditionally been fairly conservative in their underwriting approach and didn't really get sucked into the price war with the likes of 123 and Setanta so to see them post losses like they have is a big concern.

The above certainly puts paid to all the naysayers that are blaming the hikes on big salaries and massive profits.

Awards for car crash claims stable for past six years, board says.

Injuries Board says money paid out has been static despite rises in insurance premiums.

The average awards made by the Injuries Board for car crash claims have been stable for the past six or seven years, an Oireachtas committee examining price increases in car insurance has been told.

<snip>

Source.

This is an interesting one. We have been told that a large part of the reason for the increases in premiums is due to increased claims. If claims through the IB have remained pretty much static then that can only mean direct settlement claims have increased in volume and payment levels. I can understand the frustration from the general populace due to the lack of transparency in where the losses suffered are coming from.

Of course with the introduction of Solvency II at the start of this year has had a big impact as the minimum capital requirements (essentially the amount of money they have to keep in reserves for claims) for insurers but that cannot be the only reason.

Whats most worrying about the above is the head of the injuries board not having any issue with whiplash claims being worth €15000 or more because "its always been that way". It makes sense that injuries that cannot be proven should be capped at a much lower premium. They are in the main nuisance claims imo and Id be confident that the majority of them are try on's. The problem is that they are nearly impossible to disprove so often times it is cheaper for an insurer to write a cheque to get rid of the claimant.

Its purely anecdotal as obviously I cannot post evidence but every claim that goes through a solicitor has 30% to 40% legal fees on top of the compensation award. You also need to include medical expenses, investigators fees, social welfare payments etc so for a €15,000 injury payment you can easily add on another €5,000 to €10,000 in associated costs.

An across the board reform is required but I cannot see that happening anytime soon unfortunately.

cplwhisper

Gotta love the solvency II act.. had that fun doing PDI-03 last month... sorry others here won't make sense of this comment

Liam McPoyle

cplwhisper wrote: »

Gotta love the solvency II act.. had that fun doing PDI-03 last month... sorry others here won't make sense of this comment

I'm studying for MDI02 at the moment, good chunk of the text is dedicated to it, pain in the flute!

Carbon125

In today's Irish Times:
Whiplash accounts for 70-80% of all personal injury claims

A new set of guidelines on the level of damages awarded for injuries has been criticised by the insurance industry for not benchmarking the figures against international norms. [...]

The figures show awards for whiplash neck injuries ranged from €15,700 for minor cases in which there was substantial recovery to between €44,600 and €77,900 for severe and permanent injuries. Whiplash accounts for between 70 and 80 per cent of all claims. [...]

“Insurance Ireland is calling for a timeframe for the publication of the next book and a commitment to internationally set benchmark awards – otherwise it will simply reinforce rising claims costs.”

Very well. Let's get started with the international comparisons ourselves. This solicitor based in Munich, Germany has a whole page dedicated to information on whiplash. Here are the interesting bits (translated obviously):

In general damages for pain and suffering range from 150 to 6000 Euro.

He then gives three examples of actual verdicts - in the low, middle and high range respectively. The low one:

For a mild case [of whiplash] resulting in 8 days of inability to work, the court awarded 250 Euro.

The middle one:

In a case of whiplash of 1st or 2nd degree resulting in a permanent reduction of earning capacity of 10% the court awarded 2500 Euro.

The high one:

The Higher Regional Court of Munich considered a pain relief amount of EUR 5,000 appropriate for a severe centrifugal trauma with partial instability of the cervical vertebral column and a reduction in earning capacity of 10%.

Special Circumstances

Carbon125 wrote: »

:

The high one:

Some dose, either this guy is parking shopping trolleys for tips or he is losing out big time. 5k compensation for an ongoing 10% loss in earning potential?

I can see why insurers would be happy with that deal but I suspect crap reporting is playing a big part here!











Any ol figures for the cost to the state for these injuries... hospitals, doctors, treatments, physio... stuff you would pay out of your own pocket here?

Carbon125

This is not crap reporting, this is an actual judgement that a court made.
I agree that this is a strangely low amount.
On the other hand, at the lower spectrum, looking at €250 compensation for a minor case of whiplash that can not be verified to actually exist with clinical equipment sounds about right and would deter fraudsters.

Special Circumstances

Carbon125 wrote: »

This is not crap reporting, this is an actual judgement that a court made.
I agree that this is a strangely low amount.

If we both agree that a 5k compensation for a severe case of whiplash leading to an ongoing loss of 10% of earnings seems a bit odd - what is omitted from that anecdote? What would be relevant to Ireland? What would the cost to the state/public be in terms of other costs that are not covered by insurance in Germany/France/Italy/Denmark/Sweden...

Do we have a definition problem that accounts for the differences in numbers of claims for whiplash? Is there a level where injuries that are all lumped together under whiplash here are classified under a different headings in other countries?

Carbon125 wrote: »

On the other hand, at the lower spectrum, looking at €250 compensation for a minor case of whiplash that can not be verified to actually exist with clinical equipment sounds about right and would deter fraudsters.

We all know a certain amount of people are milking claims with some degree of truth in them. We all know a certain amount are fabricating claims. But I know people that genuinely needed a lot of physio and time before they could get a decent nights sleep, come home from work without being in pain, take part in their hobbies/sports. Several other posters have experienced whiplash, maybe they will agree with this.

If somebody can show an article/report/whatever from Germany etc that shows people in these situations being offered "€250 or a kick in the hole, take it or leave it" for something that is entirely plausible from a physiological/physics point of view and can't be shown to NOT exist...

€250 wouldn't even pay for the physio here. That's not to say that 15, 16k should be the default payout by any means.

If anyone is going to go to that trouble of digging out a decent detailed report on a claim/award from Germany or wherever, could they include some stats on the total cost per claim, in terms of treatments etc outside of any compensation.

It's an apples and sauerkraut comparison otherwise really isn't it?



In Germany, is it acceptable for insurers to refuse to cover people who have suffered a whiplash injury through no fault of their own?


In Germany, is it acceptable for insurers to refuse to load premiums for people who have suffered a whiplash injury through no fault of their own?








I'm not here to just cause trouble for the sake of it, it's not personal unless somebody makes it personal... but when these "articles" come out with glaringly odd figures and rationale I just have to question them.

Carbon125

Hi Special, those examples are not from an article. They are from the website of a solicitor who specializes in this field. Someone who tries to get as much compensation for his client as possible.

The person who got €250 and 8 days off work surely received physiotherapy, paid for through insurance. But that money would go directly to the physiotherapist, not anywhere else. Just to make sure it wouldn't end up in the beer fund. Accidentally, like.

Would love to hear from the Polish, Dutch, Italian posters here...

Special Circumstances

Carbon125 wrote: »

Hi Special, those examples are not from an article. They are from the website of a solicitor who specializes in this field. Someone who tries to get as much compensation for his client as possible.

The person who got €250 and 8 days off work surely received physiotherapy, paid for through insurance. But that money would go directly to the physiotherapist, not anywhere else. Just to make sure it wouldn't end up in the beer fund. Accidentally, like.

Would love to hear from the Polish, Dutch, Italian posters here...

That's what I thought too, but the "award in country X" figure is always presented here as being some total figure equivalent to the awards made here.

Unless they client really is collecting trolleys for change I'm not sure it's great advertising for the solicitor to say he got him 5k for ongoing loss of earnings though! There's important info missing there.

Henry Ford III

I read somewhere that you get no compensation in France for whiplash. Could this be true?

Liam McPoyle

Not directly related to motor insurance but its symptomatic of peoples attitude when it comes to making frivolous claims which pushes up premiums.

Woman trapped in shopping centre lift for just over four minutes awarded €25,000

Mother-of-three Marie Dicker (54), a department store supervisor, suffered a direct psychiatric injury as a result of the incident which led to the resurfacing of childhood claustrophobia she had suffered from, Mr Justice Anthony Barr said.
She sued the Square Management Ltd and Pickerings Lifts Ltd over the incident at the Square shopping centre, Tallaght, Dublin, on Auagust 31, 2012.

<snip>

A psychiatrist for the defendants told the court he did not find any symptoms of anxiety when he saw her.
Mr Justice Barr said he was satisfied she suffered a psychiatric injury as a direct result of being trapped in the lift.

"The extent of the injury was somewhat out of the norm, due to the fact the plaintiff had suffered from claustrophobia as a child," he said

Source.

IMO cases like this are an utter disgrace.

If she had been in it for a few hours then maybe one could see how she would be traumatised.

But €25,000 for 4 and a half minutes in a lift. Disgusting from the courts and the legal firm that represented her.

TDs to call regulator for second grilling on insurance

Central Bank deputy governor Cyril Roux faces a second grilling from TDs and senators following spikey exchanges earlier this week.

Mr Roux raised the hackles of the politicians when he appeared before an Oireachtas committee to discuss motor insurance hikes.
He was accused of failing to protect consumers and not answering questions, and was told that the Central Bank took too long to spot problems with insurance companies.

<snip>

Earlier this year, the Office of the Information Commissioner found the Central Bank was wrong in its interpretation of the Freedom of Information (FoI) Act, which had seen it refuse access to some records.

Source

Personally I dont rate Charlie Weston as a correspondent, he is imo a hack journalist that specialises in a hand wringing, Joe Duffy listener kind of sensationalist writing.

I find it amusing that there is never any mention of how cheap insurance has been over the last decade. The fact remains consumers were spoiled with the pricing.

This line in particular is laughable.

Premiums have shot up by 70pc in the past three years, as insurers have been accused of under-pricing motor policies and of not putting aside sufficient reserves to meet claims

So people are aware that the market was under priced, and aware of the increased requirements of Solvency II.

How precisely are the insurers supposed to protect themselves if prices dont increase?

The Setanta ruling is still up in the air but Ive no doubt that the MIBI will have to foot the bill.

The collapse of that company, of Enterprise, the funding problems at 123, the financial mire at FBD, are people really that stupid that they cannot see the market is in a very bad position at the moment.

With court awards like in the first article is it any feckin wonder!!

Liam McPoyle

Just came across the Central Banks Insurance statistics for 2015 on LinkedIn.

Overall there was an income of €3,292,000,000 with an underwriting loss of €272,000,000.

This was somewhat offset by investment income which reduced the overall loss to €146,000,000.

For motor alone the income was approx €950,000,000 with an over all loss after investment income of €221,000,000.

On mobile so cannot post the link.

I'm sure there will STILL be some of the myopic individuals around here that will claim its all a lie, that insurers are somehow squirreling millions and millions away, hiding it from the central bank, their shareholders and all other interested parties.

For those with even an iota of cop on they will realise just what bad condition the market is over here and can understand why the increases have been so steep.

Liam McPoyle

Another week, another unrated insurer going tits up.

https://www.centralbank.ie/press-area/press-releases/Pages/StatementonGableInsuranceAG.aspx

http://www.irishtimes.com/business/media-and-marketing/seen-and-heard-1-000-pubs-and-shops-in-insurance-limbo-1.2840362

Thankfully they have only around 1000 policies live in Ireland at the moment.

They were primarily targetting pub and retail risks which are quite distressed due to the volume of public liability claims.

They were offering bargain basement pricing way under what is safe and practical.

A lesson for anyone with a pub or a shop business.

Companies like this along with some of the other yellow pack brands are best avoided.

You may save something on your annual premium but the ultimate cost to you could be infinitely worse.

Liam McPoyle

Bad news for drivers as motor insurance premiums are set to continue rising.

The average motor premium will go up by €130 by the middle of next year, as the insurance crisis continues.

Credit rating agency Standards & Poor’s (S&P) said in a new report that motorists are typically paying €900 a year for cover at the moment.
<snip>
The ratings agency also listed the slow pace of settling claims, the need higher provisioning due to the introduce of periodic payment orders, and high expense costs in insurance companies for the insurance debacle.

Source

Pretty damning indictment of our government and legal fraternity.

Court awards are up and the speed at which cases are getting through the courts is down.

Who benefits the most from that?

Id love to see stats for the average premiums being paid for the average driver. In the course of my day there are very few people getting €900+ renewals and of those that are, its generally if there has been claims or is a young driver on the policy.

Central Bank can't lower premiums - but we can hold insurers to account

Many motorists have seen steep increases in their insurance premiums in recent times, and are understandably asking why.
<snip>
The Central Bank is committed to working with the Oireachtas Committee on Finance, which is extensively examining the issue; the Department of Finance working group; and other stakeholders, as is appropriate to our mandate.

Cyril Roux is Deputy Governor Financial Regulation at the Central Bank

Source

This part stood out in particular

On the first point, the Central Bank has intervened successfully in recent years to ensure the solvency of Irish insurers. Irish insurance companies providing so-called non-life cover (typically motor and home insurance), and which are prudentially regulated by the bank, ran up combined motor underwriting losses of €684m from 2013 to 2015, mainly due to the gap between premiums and claims.

Ive been saying for years that premiums were too low and had been for a decade.

People need to realise that yes, their premiums are increasing this year, but they have saved probably a couple of grand over the last 5 to 10 years, that came at a time when they would have needed it most considering the economic environment we went through.

Supreme Court reserves judgment on Setanta insurance fallout

MIBI argues State Insurance Compensation Fund should meet estimated €90m bill
<snip>
The core issue in the appeal is the interpretation of that agreement.
If the court finds the MIBI is liable, it will consider how that impacts on the power of the High Court to approve payments out of the Insurance Compensation Fund if the High Court believes that is the only way of meeting such claims.

Source

If the Courts do not overturn this absolutely preposterous ruling then it is beyond a joke.

Firstly, the MIBI exists to compensate people where there is no policy of insurance in place, at the time of the claims there was a policy in place.

Secondly, it sets a massive precedent that would basically mean that any insurer that goes belly up can walk away and the other insurers / consumers will be left to carry the can.

Id also point out that there are only 1750 claims but the estimated costs are around €90,000,000. Thats an average per claim of €50,000. Its a good illustration of the claims costs in Ireland at the moment for those individuals that are looking for more information and that believe insurers are telling porkies.

Its also quite telling that the Law Society are objecting to the appeal.

Purely my own speculation but if the government pick up the tab then they can say goodbye to alot of fees that they would get should the claims be settled in the normal MIBI fashion.

Interesting and worrying times ahead.

Liam McPoyle

Source.

Judge asks DPP to consider prosecution over crash claim

A High Court judge has asked the DPP to consider taking a criminal prosecution against a Co Limerick man for falsely claiming damages arising from a road crash. Judge Colm MacEochaidh, following a civil hearing in Limerick, instructed that the court’s digital audio recording of the case along with relevant papers be sent to the DPP.

<snip>

He said he was referring the matter to the DPP and ordered that the digital audio recording and relevant papers be sent to the DPP.

Its about time someone in the court system has brought this up. There are currently no penalties whatsoever for people making bogey claims, I have no doubt that if there were real consequences such as a hefty fine and / or a criminal conviction we would see a dramatic drop in falsified claims.

Liam McPoyle

'This is one for YouTube' - Supermacs founder Pat McDonagh on fraudulent claims and Ireland's compo-culture

If the fraudulent claims and ‘compo-culture’ in Ireland persists, more people will not be able to afford – or willing to get – insurance, according to Supermacs founder Pat McDonagh.

<snip>

“At the moment, there is absolutely no penalty for fraudulent claims; you have to ask yourself the question ‘who’s benefiting from this’?,’ said McDonagh.

Source incl the video in question.

I find it very interesting that McDonagh echoes many of the things I have been saying for the last 12 months or more with relation to the various causes of the price increases. Im sure he is just an insurance apologist too though.

The video itself is an absolute disgrace. One would assume that the fact there was CCTV footage would have been disclosed fairly early yet the individual still proceeded with the attempted claim. He also presumably got away completely free.

Out legal system is an absolute joke.

Liam McPoyle

Judge ‘cannot believe a word’ from plaintiffs in insurance case

Three claimants brought personal injury claims over ‘low impact’ crash in Dublin

Source

Finally!!

Some common sense prevails!!

Hopefully this is the beginning of it. Make no mistake, this is a massive ruling, a real potential game changer. Even though liability was not in question ie there was a coming together of the vehicles with the defendant being at fault, the judge knew the claimants were lying about their injuries.

The fact that costs were awarded against the claimants is also a massive step. In reality, Allianz are unlikely to recover any of their outlay but the fact that they judge has ordered them to pay, hopefully it will deter alot of others from buying the lottery ticket that is insurance claims in Ireland.

Absolutely brilliant news.

cml387

Another article in the Indo this morning about a mysterious vanishing car that hit a bus leading to numerous claims.
Link

I have no absolute evidence for this but it does seem that insurance comapanies are beginning to get more proactive in defending claims.

Liam McPoyle

cml387 wrote: »

Another article in the Indo this morning about a mysterious vanishing car that hit a bus leading to numerous claims.
Link

I have no absolute evidence for this but it does seem that insurance comapanies are beginning to get more proactive in defending claims.

Hmmm, a group of very close people are involved in an accident and the car that crashes into them disappears into the night.

Nothing fishy there.



Insurers do take a proactive stance when it comes to defending claims but often they are very difficult to actually defend against, particularly the likes of whiplash where there may not be any physical symptoms but the claimant can have genuinely suffered.

What pleases me most is the judge using some common sense. Logic would dictate that the low impact speed of the collision coupled with the minimal damage to the car means that it is beyond reasonable doubt that the passengers suffered any actual injuries.

Thats the kind of logical, forward thinking that has been sorely lacking when it comes to many of these types of claims.

The fact that the costs were awarded against the claimants (hopefully we see more of that) will hopefully make the solicitors that make a living from these claims be more selective in those they try and represent.

All it takes is a common sense approach, hopefully this is the first step to a complete overhaul.