Ms Moyagh Murdock:

Chairman and committee members, I am delighted to be here today to contribute to the committee's scrutiny of the personal injuries resolution board Bill 2022. I am the chief executive of Insurance Ireland and I am joined today by my colleagues, Mr. Florian Wimber, director of advocacy, communications and public affairs, and Mr. Michael Curtin and Mr. Michael Horan, managers from the regulation and policy development section.

Insurance Ireland is the representative body of the Irish insurance industry, with more than 133 members providing cover to over 25 million customers globally in more than 110 countries. Irish insurers invest nearly €490 billion annually. Our members employ approximately 35,000 people in Ireland and contribute €1.6 billion in tax income per year to the economy. Ireland is the fifth largest market for insurance in the EU and the biggest exporter of insurance services.

The proposal to reform the Personal Injuries Assessment Board with this Bill is a key element of the Government’s agenda for insurance reform. Insurance Ireland and our members strongly support the objectives of the Bill. It would be remiss of me not to re-emphasis the fact that our member companies recognise the value and the work of PIAB in providing for swifter settlement of personal injury claims and its impact on reducing legal costs since its inception in 2004.

The last time Ireland introduced such major reform, with the establishment of the Personal Injuries Assessment Board, was in 2004. Insurers responded positively and consumers benefitted. We have continually advocated for the strengthening of the powers of PIAB as a means of reducing the legal costs involved in claims settlement. The benefit to consumers of strengthening these powers is that claimants would receive their compensation more quickly and unnecessary litigation would be avoided, thus saving on legal costs.

If the Bill is enacted, the extended mandate will allow PIAB to settle more personal injuries claims more effectively and efficiently, avoiding costly and lengthy litigation. This will lead to a more stable insurance market to the benefit of consumers, businesses and insurers alike. As my colleague has already communicated, the cost of insurance and the duration of litigation procedures present a fundamental threat to consumers and businesses. In its most recent motor report on the national claims information database, the Central Bank of Ireland reported that in 2020 the legal costs associated with settling personal injury claims through litigation were €16,064, compared with costs of €841 through PIAB. That is almost 20 times more. The Central Bank further noted that litigation has a very limited effect on the compensation of the claimant. Therefore, extending the mandate of PIAB to enable it to resolve more claims should result in significantly reduced legal costs and, consequently, reduced cost of claims. In addition, the Central Bank’s report found that an average settlement through PIAB takes approximately 2.3 years, and is often much quicker, compared with 4.2 years for a settlement through the courts and litigation. Insurers have consistently said that consumers will benefit from quicker assessments and swifter payment of their compensation through PIAB and that doing so will avoid the lengthy legal process.

On the specific provisions in the general scheme, we note that parties will be asked to consent to mediation and, if mutually agreeable, it is envisaged that PIAB will facilitate mediation via a mediation officer appointed by it. More complex injury claims will be dealt with by PIAB, including wholly psychological injuries, which are currently released by PIAB to be settled in the courts. Traditionally, PIAB has not assessed these claims because there was no categorisation in the old book of quantum. The new personal injuries guidelines make provision for the assessment of injuries of a psychological nature. This increases the number of personal injury claims that can be resolved through PIAB, by including these types of claims not previously assessed by it. PIAB currently has a maximum statutory timeframe of 15 months within which to assess any claim. Claims that involve more complex injuries or injuries with a potential long-term prognosis that cannot be settled within the 15-month timeframe are released by PIAB to be pursued through litigation. The general scheme proposes an extension of up to two years beyond the current maximum period of 15 months. This would allow for increased resolution of these types of claims within PIAB, which would again greatly reduce the time and cost of settling complex claims.

The reform of PIAB is an essential element of the-whole-of-government approach to the progress of the action plan for insurance reform. It will improve the effectiveness and efficiency of claims processing, claims assessment and settlement processes and will reduce the need for costly and lengthy litigation. The proposed Bill will improve the Irish insurance market environment to the benefit of consumers, businesses and insurers. We welcome the Cabinet’s recent agreement on a proposal to amend the duty of care and occupiers’ liability in Ireland. Together with this proposed Bill and the already implemented personal injuries guidelines, this rebalancing of the duty of care will contribute to a consistent and comprehensive suite of reforms to the Irish insurance market.

Insurance Ireland welcomes the proposed reforms in this proposed Bill and the changes the renamed and refocused personal injuries resolution board will bring to the Irish insurance sector. I thank the committee for this opportunity to present our position and I look forward to answering any questions members may have.