Seán Sherlock (Cork East, Labour) | Oireachtas source

The reality contradicts this. If I am to be very frank and blunt, insurance is a hard-nosed business and is highly competitive. The companies have shareholders and a bottom line. The witnesses cannot come into the Oireachtas and state that there are eight aspirations or solutions to this and that the sixth is to reduce legal costs, when we know, anecdotally and factually, that insurance companies settle out of court without investigating to a large extent whether a claim in the first instance was fraudulent, or where there is a history of repetitive cases involving people who are up and down the steps before it goes into the courtroom. There is a culture of settling before going to court, where the case could be interrogated properly, and the industry is not taking on the fraudsters. The companies have realised it is much easier to just settle and get cases off the books and off the table.

The second solution suggested is tackling whiplash. The witnesses have stated that eight out of ten motor insurance claims in Ireland are for whiplash and awards here are three times those in the UK. They stated that premiums are a function of the costs of claims, so high awards mean higher premiums. However, they did not tell us the percentage of these whiplash claims which are settled without going through an Injuries Board process or are settled outside the doors of the court . Until we can drill down into this information it appears that the insurance industry will ride the storm, apply the further 20% increase in the premiums already signalled to the market, and go through the investigation with the Competition and Consumer Protection Commission and pay lip service to what we are trying to achieve, which is lower costs for motorists. It is plus ça change, plus c'est la même chose.

There is no evidence here that the industry is really making an honest effort, beyond aspirational language, to reduce premiums.