Insurers are urging the Government to engage in insurance reform aimed at reducing the cost of claims.
In its prebudget submission, Insurance Ireland called for Government to act “swiftly” on its pre-election promise to develop new guidelines for legal costs in civil litigation cases.
The industry lobby group said legal bills were “driving up the cost of claims in Ireland” year on year, calling for a “comprehensive review” of fees. It said Irish society needed to “wean [itself] off litigation and reduce legal costs”.
It said it welcomed the news that the proposed “seismic” 16.7 per cent increase to award levels in courts would not happen and it called for a review of the level of injury claims awards to take place on a continuing basis.
It said a “robust benchmarking exercise” against the level of claim awards in the UK and the rest of Europe was necessary before any changes to award levels were made.
Separately, Insurance Ireland also called for the establishment of an equivalent saving model akin to the UK’s individual saving account (ISA).
In the UK, this system allows investors to put up to £20,000 (€23,000) into the ISA without paying tax.
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The groups said the model, which is also seen in Italy and Sweden, could provide a “mechanism for Irish retail investors to increase participation in capital markets”.
It also called for more clarity in the roll-out of pension auto-enrolment (AE), though noted it was “supportive” of the system.
“A key issue with the current AE system is the inconsistency of the regulation of private pension schemes versus the new AE system,” the group said. “It appears AE will be held to lower standard than the existing private system.”
It said status of the AE system meant it would not be subject to existing pensions-related legislation – unlike the private pensions market – instead only being regulated by a “sole piece of legislation”.
The lobby group called for clarity on “what the retirement benefits will look like when an employee comes to retirement age”, noting its concern that the system might lead to employers closing existing occupational pensions schemes which may offer better benefits to employees.
It also noted concerns that auto-enrolment was not “gender proof”, instead exacerbating gaps in pension provision between men and women.
Insurance Ireland also said it supported European Commission initiatives aimed at simplifying regulation and the reduction of reporting requirements for companies to enable the “stronger growth and competitiveness” of the European economy.
The group said it was “essential” the Irish Government took a “proactive approach” in implementing European “simplification initiatives” and remained committed to “enhancing the competitiveness” of the domestic insurance sector.
Moyagh Murdock, the chief executive of Insurance Ireland, described Ireland as a “leading global centre” for the sector, which employs 35,000 people
“It is important that Ireland’s policies are business friendly and create the conditions for continued success in both driving a competitive insurance market for Ireland’s consumer and business customers as well as continuing to build our international insurance base,” she said.
The group said the industry’s €278.5 million in Storm Éowyn payouts pointed to its benefit to the country in providing “essential services and peace of mind to individuals and businesses across the country”.