Mr. Peter Boland:

I am joined by my colleagues, Ms Linda Murray, director of the Alliance for Insurance Reform and owner of Huckleberry's den and play centre in Navan, and Mr. Gerry Monks, director of JDM Insurance. Mr. Noel Anderson of the Licensed Vintners Association is in the Gallery.

Since we last presented to the committee in May 2018, the situation for our members had worsened considerably. In particular, small businesses are now closing on a weekly basis and members right across the spectrum are reporting savage increases in liability insurance renewals. My colleagues will give members evidence in this respect. The crisis is spreading to a broader range of SME sectors, as illustrated by our more recent members, including Nursing Homes Ireland, the Irish Travel Agents Association, the Association of Irish Showmen's Guild which represents circuses and fairs around the country, and Retail Excellence. The crisis is existential in many of those sectors. Businesses across the leisure, childcare and hospitality areas are threatened and one could add many community, charity, sporting and arts organisations to the list. There is increasing alarm among members regarding the slow pace of key reforms and it is clear to us that the dead hand of vested interests and a lack of sufficient political will are grinding the response to the crisis to a halt.

My colleagues will gladly share their specific experiences with members but right now I intend to cut to the chase and focus on analysis and solutions. When we last presented to the committee we submitted ten asks, practical measures that would help reform this dysfunctional area quickly. We further communicated these asks to the cost of insurance working group, CIWG, and to the Ministers involved. While we acknowledge the amendment of section 8 of the Civil Liability and Courts Act 2004, which now obliges claimants to inform defendants of a potential claim within one month, progress on other key reforms remains frustratingly slow. It is illuminating to note in this regard that when a similar crisis arose in 2002, the major reforms were in place within two and a half years. Following on the publication of the Motor Insurance Advisory Board, MIAB, report in April 2002 the two key responses, namely, the establishment of the PIAB and the commencement of the Civil Liability and Courts Act, were implemented by July 2004 and September 2004, respectively. By contrast, the cost of insurance working group report was published in January 2017 but, over two years later, the key reforms remain uncompleted. Indeed, of the 68 recommendations made in this committee's report on the rising cost of motor insurance from November 2016, our analysis suggests that only 17 have been actioned. Of the CIWG recommendations, ongoing delays in the establishment of a long promised Garda insurance fraud unit and the recalibration of the book of quantum are prolonging and amplifying the crisis.

On the CIWG recommendations, I will start with the recommendation to establish a Garda insurance fraud unit. Insurance fraud is a crime with profound consequences up to and including the loss of livelihood and valuable public facilities. Additionally, it criminalises the very process of making a personal injury claim, tarnishing all claimants with the same brush and deterring genuine claimants from seeking redress.

An oft-repeated quote from a member of the public at an alliance meeting last year is as follows.

If I had a need for big money and I had a choice between robbing a bank and faking an injury, I'd pick the fake injury every day. More money and no consequences if I'm found out.

It is absolutely clear from the experience of our members that An Garda Síochána is not currently equipped to deal with this issue. A specialised unit to deal with insurance fraud has been a key element of the cost of insurance working group strategy since the start and a key recommendation of the Personal Injuries Commission. We are bewildered by how long it has taken to establish the same unit, with issues such as political support, a year-long Insurance Ireland cost-benefit analysis and sources of funding wheeled out to justify the delays. It must be established without further delay if the scourge of fraudulent and exaggerated claims is to be meaningfully addressed. Incidentally, on this point, I welcome the statement by the Minister of State, Deputy D'Arcy, on RTÉ Radio 1 yesterday evening that An Garda Síochána is investigating some medical practitioners and legal firms in this regard. However, these are one-off investigations and do not constitute a full strategic response to the issue.

I refer to recalibration of the book of quantum. As documented in the Personal Injuries Commission reports, the general damages awarded for minor injuries in Ireland bear no relation to those made in other countries, which makes Ireland a very attractive place to sustain a minor injury. This applies not just to whiplash injuries, as covered in detail in the Personal Injuries Commission, PIC, reports, but also to all minor, fully recovered soft tissue injuries. Additionally, there is no consistency between awards for identical injuries between the Personal Injuries Assessment Board and the courts, or from judge to judge, which makes it very attractive in personal injury cases to reject a Personal Injuries Assessment Board, PIAB, offer and head for the courts, safe in the knowledge that with the right judge, the rewards from the court or by direct settlement with the insurer may be substantially better.

It is now abundantly clear that the book of quantum and the current process of its drafting are no longer fit for purpose. However, there has been much debate in recent months about the best approach to address this. We are fearful that the net result of all this debate will be no action and no change, a situation forced by vested interests making hundreds of millions in income from the status quo. This will have catastrophic results for our members as they cannot sustain current premium levels, never mind the additional increases in insurance premiums that may arise if quantum for minor injuries is not addressed. What makes the delay in doing so all the more frustrating is that awards are already capped in this country at the top end of the scale by the Court of Appeal in Nolan v. Wirenski, which has also clarified the principle of proportionality in Shannon v. O'Sullivan. The framework and principles for a recalibration are, therefore, already in place. We ask that the book of quantum is calibrated to reflect international norms and norms already established by the Court of Appeal as a matter of urgency. On this point, we welcome the passage of Committee Stage of the Judicial Council Bill in the Seanad on Tuesday night. However, as it has taken more than a year to get to this stage, we fear that without political will, the Bill will die a slow death.

I refer to a schedule of forecast reductions. If anything, the situation regarding transparency in this systemically important industry has worsened since we last presented to the committee. As well as the blue book, which gave comprehensive data oversight of the insurance industry, we have learned that the Central Bank has abandoned publication of the comprehensive data on policyholder demographics and cost trends provided by the private motor insurance statistics report. For example, analysing trends in insurance costs for young drivers is no longer possible. This approach to the reports, which offered key consumer protection insights, can only be described as data vandalism. Data from the national claims information database for the years 2009 to 2018 are due from the Central Bank in the second half of this year. Initially, it is expected that the data regarding motor insurance will be very limited. However, neither the national claims information database nor the Central Statistics Office, CSO, has any concrete plans to issue any data on liability insurance costs. Reports on possible plans from both are due by the end of 2019. In this data vacuum both Ms Murray and Mr. Monks are willing to share definitive data on their sectors. From a broader perspective, policyholders cannot plan or be protected if there is no data to measure what is happening or what can be expected to happen. We ask, therefore, that the Department of Finance produce a schedule of forecast reductions for reforms using the 2002 Irish Insurance Federation, IIF, schedule as a model, which I have attached in appendix 3 to my written submission. It is abundantly clear to us at this stage that lawyers and insurance companies will do anything to stop real reform, working tirelessly to slow reforms and blaming each other to deflect from their own responsibilities. This is why it is imperative that political will drives this agenda. Otherwise, we will be here again in a year's time providing a similar update.

This concludes our formal presentation. As an alliance, we are intensely aware of how urgent this issue is for our members and their employees and volunteers. We hope the committee can help us in getting meaningful action quickly and we are happy to take questions.