Tánaiste Leo Varadkar has said he expects insurance premiums will be reduced “quite soon” after preliminary data from the Personal Injuries Assessment Board suggested the average award has decreased by around 50%.
The information is contained in the first implementation report of the Action Plan for Insurance Reform, which he presented to Cabinet at Dublin Castle this morning.
Mr Varadkar, who is also Minister for Enterprise, Trade and Employment, published the first Action Plan for Insurance Reform last December.
It aims to make the insurance industry more competitive and consumer friendly.
The Tánaiste said the 50% reduction in compensations paid by the Personal Injuries Assessment Board (PIAB) will not be matched by a 50% fall in premiums but there will be “a recognisable reduction” in the cost of those premiums.
He told RTÉ’s News At One that he anticipates seeing the cost of premiums being reduced “quite soon” – over the next six months.
Minister Varadkar said reform of the PIAB will help to reduce legal costs and more competition will also help to reduce premiums.
Preliminary data regarding the Personal Injuries Guidelines suggests the average award has decreased by approximately 50% with 78% of awards being €15,000 or lower, as compared to some 30% last year.
Later this year, the Government plans to further strengthen the PIAB as well as the Consumer Protection Commission via new legislation.
The Tánaiste said the Action Plan for Insurance Reform aims to make insurance more available for people and to reduce the cost of insurance for motorists, homeowners, businesses, community and sporting groups.
He said 34 of 66 actions have been implemented and 20 more will be completed in the coming six months.
They include the establishment of a new office to promote competition in the industry and the introduction of a new law on perjury to help crack down on fraudulent and exaggerated claims.
Mr Varadkar said plans are in place to introduce new powers for the Competition and Consumer Commission, examine the report from the Central Bank on dual pricing and change the law on occupiers’ liability.
The Alliance for Insurance Reform has said it is baffled at how long it is taking for cost reductions to feed through to drivers and business owners.
The alliance’s spokesperson Peter Boland told RTÉ’s Morning Ireland that while he welcomes the report, the “real test is what happens next”.
He said the recovery of Irish society will not happen at the pace it should happen at “unless we get insurance sorted”.
Mr Boland said the alliance would have expected to see premiums dropping from the 24 April but “there is no evidence that is happening so far”.
He said this has been an existential issue for the “best part of five years” and they needed to see reductions in insurance costs immediately.
He added that it was “extraordinary” how businesses and voluntary community groups have managed to keep going despite the cost of insurance.
Ireland is “completely out of line” with the rest of Europe in terms of insurance costs, Mr Boland said.