Settlements by litigation ‘significantly higher’, according to Central Bank report
The Central Bank of Ireland has published its first Employers’ Liability, Public Liability and Commercial Property Insurance Report providing key statistics on commercial insurance in Ireland.
Among its key findings, the report shows that for all claims, settlements through the litigated channel are significantly higher than settlements through the Personal Injuries Assessment Board (PIAB) or direct claims.
The report covers employers’ liability, public liability and commercial property insurance and follows the 2019 and 2020 National Claims Information Database (NCID) reports on private motor insurance.
The report showed an overall average premium for package policies decreased by 16 per cent over the period 2009 and 2013, then increase by 24 per cent from 2013 to 2019. Overall, average premium increased by four per cent between 2009 and 2019.
Profitability for employers’ liability, public liability and commercial property combined saw an increase of five per cent of total income between 2009 and 2019.
Between the same years, 63 per cent of the total income received has been used to cover claims and expenses related to settling claims.
When it came to settlements, claims through the litigated channel saw much higher compensation costs than other channels. The legal costs attached to PIAB was on average €1k while litigated settlements attracted on average €21k.
Mark Cassidy, director of economics and statistics, said: “Today, we are publishing the first Employers’ Liability, Public Liability, and Commercial Property Insurance Report of the NCID. This marks another milestone in the NCID series and is the first time we have looked at this complex area of insurance. This complexity is evident in certain findings captured in the report, particularly calculating an average premium metric that accurately reflects market price movements.
“Today’s report nevertheless provides key information on a number of areas, including costs, claims, and settlement channels. We can see that insurers’ operating profit fluctuated between periods of profit and loss. The data also highlights the considerable legal costs and significant time periods associated with settling injury claims through litigation.
“The Central Bank will continue to publish this data on an annual basis. This will allow us to gradually improve the transparency of premium and settlement information for particular sectors. This will help to bring transparency to the market for the public, and inform the work of the Oireachtas and wider stakeholders in their consideration of these issues.”