Some businesses are reportedly being forced to close due to sky high insurance premiums.
Insurance premiums across all industries have been increasing exponentially over the last number of years forcing small businesses in particular to feel the pinch. Just this week some of Ireland’s largest insurers such as FBD, Aviva and Axa have all profits from their first 6 months. So why are consumers, particularly in terms of public liability and business insurance still feeling the pinch? Experts within the industry have alluded to a number of factors which are driving up costs and ultimately placing a strain on small businesses.
The first of these factors would be a relatively new claims culture which is developing across Ireland, this has been earmarked by the Personal Injuries Assessment Board (PIAB) as they have reported increases in personal injury claims across the country. When you couple this with the fact that a number of insurers will settle public liability claims out of court in order to avoid high legal costs, the consumers have essentially been left in the perilous position of footing the bill.
Another issue with the high levels of public insurance claims is the rise of serial claimants who are making a ‘substantial living’ from falsifying multiple insurance claims and are putting small businesses under severe pressure. A number of businesses across the country have reported that they have seen people throwing themselves on the floor in order to exploit the system. The final issue is the precarious nature of soft tissue injuries, which coincidentally, are also on the rise. These injuries occur when a degree of trauma occurs on the muscles, tendons or ligaments. Because of the nature of these injuries they can be incredibly difficult to either prove or disprove and also to measure the extent or necessary healing times. Due to these factors, making claims for soft tissue injuries can lead to a litany of problems for an insurance company.
Insuremyvan.ie‘s Managing Director Jonathan Hehir has advocated that insurers deal with these cases using a “Care over cash approach” meaning that instead of settling these cases immediately and simply writing cheques in order to avoid high legal costs, they should be provided with physiotherapy and any relevant loss of earnings. This would ensure that any would be fraudsters will be deterred from attempting to exploit the current settlement scheme.
These are the primary reasons that insurance premiums have been so susceptible to fluctuations over the past number of years. However these are all addressable issues to a certain extent, the aforementioned care over cash attitude towards claims would be a start. Their have also been widespread calls from industry experts for a centralised claims register in order to be able to identify fraudulent claimants and stop them exploiting the system. PIAB Is also currently under review so it should become more effective in the near future.
Listen to the full excerpt from Insuremyvan.ie‘s Managing Director discussing these issues and more on Newstalk below.