Updated / Thursday, 20 Mar 2025 00:01
Most injury insurance claims are settled through litigation as opposed to the State’s Injuries Board, a new report by the Central Bank has found.
The National Claims Information Database report said 68% of settlements were made through litigation in 2023.
It found legal costs were significantly higher for cases involving litigation.
It said the average personal liability injury settlement costs for claims of less than €150,000 was €23,000 for both cases involving litigation and those handled by the Injuries Board between 2015 and 2023.
However, if the cases were taken through the Injuries Board, the legal costs were €1,000 but if they involved litigation the legal costs were €23,000.
The Alliance for Insurance Reform said the high litigation costs and the large volume of claimants settling via the litigation route continued to “adversely affect” the cost of insurance overheads businesses.
Grocery store owner and Alliance Board member, Flora Crowe said: “This report makes clear that too few cases are being disposed of at the Injuries Board and too many are unnecessarily pursuing the more expensive litigation channel.”
Chief Executive of Insurance Ireland Moyagh Murdock said: “The true impact of the Personal Injury guidelines is still to be realised due to the low number of claims settled under the guidelines.”
She added that the outlook was uncertain due to the potential increase in award levels due to a recommendation of the Judicial Council to increase awards by 16.7%.
The report says insurers providing public liability, employers liability and personal injury coverage had an operating profit of 13% of total income in 2023.
It indicates there has been a significant improvement in profitability recently because over the period 2009 to 2023, operating profit was 2.1% of total income.
The report found the average cost of public liability claims rose by almost 40% between 2019 and 2023.
The report records a 37% increase over those four years while the average cost of employer’s liability claims rose by 31% in that time span.
However, the report says the number of claims has been volatile over the past 15 years.
It is estimated the total cost of claims for employer’s liability, public liability and commercial property insurance in 2023 was €630 million, arising from almost 31,500 claims.
That number is significantly higher than in 2022, but almost €40 million lower than 2009 when there were 50,600 claims made.
