Litigated settlements made up 71pc of injuries claims in 2024, the data shows, mostly settled before the court itself made an award.
The Central Bank’s National Claims Information Database (NCID) Liability Insurance Report for 2024 shows the business insurance industry in Ireland is profitable – with an average operating profit after tax of 10pc across the sector in 2024. Taken as a whole since 2020 the margin fell to just 2.1pc, hit by unusually big payouts, including business interruption claims during Covid.
The report looks at employers’ liability insurance, personal liability and commercial property insurance – mostly bought in packages or bundles by business owners.
It found policies costing €5,000 or less account for 90pc of all business, though costs do vary by sector. Just 2pc of policies cost €25,000 or more a year.
The report shows a strikingly high number of personal injuries claims continue to go though the courts – by far the costlier option – despite data indicating compensation payouts are almost identical in most cases that go to the Injuries Resolution Board.
Claims for under €150,000 make up over 90pc of employers’ liability and personal liability cases.
Where they settle privately, the average compensation paid is €19,295 and legal cost average €3,688.
Where cases go to the Injuries Board, average compensation is €25,484 and legal cost average €694.
However, when cases were litigated – fought through the courts – compensation remained almost the same, at €25,935, but legal costs shoot up to €25,055.
Despite almost identical outcomes and lower costs, just 18pc of cases are taken via the Injuries Board versus 71pc that go to litigation.
With the vast majority of claims being settled via litigation, those legal costs are having a material impact on the price of insurance, according to the Alliance for Insurance Reform, which represents businesses that buy insurance.
“With legal fees now matching awards in the majority of claims, the Government needs to take action to ensure far greater numbers are settled at the Injuries Resolution Board (IRB),” they said.
The Central Bank data shows the cost of premiums rose 4pc last year, and are up 23pc since 2020.
Higher costs in the economy, including construction inflation which impacts commercial property insurance, is a factor, the report says.
Alliance for Insurance Reform board member Tracy Sheridan, who owns Kidspace play centres in Rathfarnham and Rathcoole, said: “We now have a system where two people with similar injuries can get similar compensation, but one case costs a few hundred euro through the Injuries Resolution Board while the other costs tens of thousands in legal fees.”
Insurance Ireland, an industry group, said the data shows Personal Injuries Guidelines are delivering meaningful and sustained impact, where they are applied.
“The report shows ongoing reductions in average settlement compensation for claims resolved under the Guidelines, demonstrating the value of a consistent, fair, and predictable framework for assessing personal injury claims,” the group said.
However, they warned the data shows the gains are being eroded by spiralling legal costs and delays in litigation.
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