The insurance industry has called for greater measures to tackle fraudulent compensation claims — with one company claiming it will be contesting some 500 “suspicious cases” awaiting trial dates in the courts.
The plea for legal reforms comes on the second anniversary of the publication of the cost of insurance working group report, which saw the establishment of the Personal Injuries Commission which is working to benchmark personal injury awards.
However two insurers have warned there are still challenges — with fraudulent claims a particular cause for concern.
Allianz said it challenged over 1,500 claimants in the courts last year, 45% of which, it claims, are potentially fraudulent.
It said each case it has won has delivered an average saving of €20,000 per claimant, and that it currently has 500 cases awaiting trial, which it deemed to be suspicious and is planning to challenge in the courts.
“These court victories against fraudsters are good news for the industry and for the consumer, who has had to bear some of the cost of fraudulent claims,” said Sean McGrath, CEO of Allianz Ireland. “The cost of investigating and mounting a case to challenge fraudulent claims is not cheap but, the long-term benefits outweigh the initial cost.”
The Personal Injuries Commission has found that the level of compensation in the Republic of Ireland for whiplash injuries is 4.4 times that of payments in England and Wales.
It has recommended the establishment of a Garda Fraud Investigation Bureau, a measure that has received the backing of Liberty Insurance.
Liberty also called for training for judges to bring about greater consistency in compensation awards, and measures that would require claimants to swear affidavits verifying their claims are valid.
This amendment would provide for civil and criminal penalties in cases where it is later found that claims are false or exaggerated.
Deirdre Ashe, director of customer and markets at Liberty Insurance, said some progress has been made in reforming the cost of insurance since the publication of the working group report.
“Independent data is telling us that the average cost of premiums has fallen,” she said. “Yet we need to do more to ensure long-term stability. For those of us who have been in the insurance market for many years, we know also that insurance in Ireland has traditionally been cyclical, with periods of both pricing spikes and, equally, declines.
“The objective for all stakeholders, whether Government or industry, is to put in place reforms which drive systemic change and maintain a stable market that is less vulnerable to turbulence and volatility.
“Our proposals will help to further stabilise our insurance market. Addressing key issues such as consistency in the value of compensation awarded to claimants, and also by more forcefully combatting and deterring fraud, will support a more balanced market for our customers and honest policy holders.”
By Joe Leogue – Irish Examiner Reporter