Destruction and aftermath of the Irish insurance industry – “Why is my premium so high or I can’t find cover?”

The destruction of the Irish insurance industry & consequential uncertainty “why is my premium so high that I can’t afford or find cover?”

Insurance industry fall from a swing - critical height calculation - (+/-) bottle of beer / glass of wine.

Without a doubt this government and proceeding elected governments have an atrocious record of poor decisions, inadequate statute books from the insurance act 1989, 2015 & amendment to the act 2018 which in layman’s terms are inaction and not fit for purpose in respect of insurance industry reforms.
Let me first preempt my comments and opinion on the Maria Bailey ‘issue’ by saying I do feel a sense of compassion and sympathy for Ms Bailey and her families recent loss. I will resist the urge to point fingers of blame (also coupled with the fact that ongoing legal proceedings are in some process or file even if the claim has been withdrawn). Readers can draw their own conclusions from the facts and findings that have happened of late over ‘swing gate’.

Maria Bailey commented previously about the claim against the Dean Hotel Dublin where she alleged injuries she suffered occurred as a result of a fall from a swing in a bar in the Dean back in July of 2015. Ms. Bailey was claiming reimbursement of her medical expenses and she said “she had a bottle of beer in her hand while on the swing and was reaching for a friend’s bottle of wine”
Roll on into 2019 and ‘swing gate’ is in the public domain – shock horror! On such a tiny Island how did this get into the public domain? The players in the story’s next chapter are interesting take note of the professions of the persons mentioned
– Starting with El jefe, our exalted leader Taoiseach Leo Varadkar who receives an ‘internal party report’ at the start of July, this report was compiled by senior counsel David Kennedy. (Pay attention to my writing and stop trying to work out how she thought she could stay on the swing with no hands!)
The report has mention of another now elected official & minister – Josepha Madigan (currently minister for culture) – I’m sure I heard a joke at the weekend about cultural activities for the hot weather – drinking in playgrounds being high up the list!
Back to the serious ‘internal report’ which gave mention to Josepha Madigan who was a practicing solicitor until 2017, she in her capacity as solicitor gave initial legal advice & guidance which was coupled with ‘assisting’ Maria Baileys PIAB (Personal Injuries Assessment Board) application.

In the interest of clarity Josepha Madigan did not continually represent Ms Bailey in her claim or the proceedings and the file was referred to another solicitor.
The report’s author compiled the findings surrounding Maria Bailey’s claim on the understanding that said report would not be issued in the public domain so draw what conclusions you will from that, similar to a redacted document there are parts in this case / claim / side show that simply don’t read or look good in the cold light of day. Surely we all have something similar or embarrassing from intoxicated shenanigans most of us have been party to or done at some point on a night out, maybe on licensed premises, hotel or an event? A festival perhaps?

The signs are at the door and dotted around the walls ‘standard disclaimers’ about management and their risk exposure while “you are on the premises”. Simple stuff like a ‘Wet floor’ yellow sign on a shop or pub floor, meanwhile businesses are shutting and folks are losing jobs because insurance cover isn’t available to certain ‘high risk’ establishments in the eyes of the risk statisticians at the underwriters.

I Welcome feed back from insurance industry professionals on the definition of ‘high risk’ businesses – petting farms, kids play activity center’s & after school establishments / pre school ‘essential’ play schools that are constantly coming under flack for the cost of child minding for the employed parent(s) – yet you can just imagine their premium increases year on year? What is it about these long run established businesses that now classify them as ‘high risk’ to insure and underwrite ?

The Government is side stepping the issue by having the law reform commission review “if it would be desirable to legislate for statutory caps on personal injury payouts”. This response to the multi faceted issue clearly demonstrates they haven’t a clue how to fix our insurance industry, courts & legal systems function and their role in the problem.
I can’t help but ask myself the question ‘who benefits the most from injury + claims and cases either before the court of settled out of court by the insurers’? The law reform commission and their review smacks a tad of the fox policing the hen house and as the digital bombardment a person (me, the author) is subjected to just by searching the phrase ‘personal injury’ clearly demonstrates that a multi million euro industry is built to attract claimants (genuine & the fraudulent alike are reading the ads & how to distinguish one from the other is key to a lower quantum or yearly total payout by insurance companies & underwriters).
One clear step that should be legislated for is the penalties for fraudulent claims, This ‘white collar’ crime that you & I & Joe public pay for in a sum we can only calculate an estimate of the overall price tag levied on all insurance premiums and the price of goods or services to us the end user. A lower overall payout figure (averaged for claims of a certain type and grouping) would indicate a downward point on what should be a trend if the corrective measures put in the claims process are working. How long this takes to pass on to our premiums? – er, em…. to be continued in the next post on what other states and countries do that keeps insurance a fraction of what it costs in Ireland today.

A recent Sun newspaper expose (article authored by Gary Meneely 22/03/18) in an article titled ‘BIG MAC & Lies” told us of a €500 K car crash scam that was busted by CCTV footage of both ‘crash victims’ cars which were spotted together at Dublin Airport McDonald’s before heading on to the M50 (CCTV footage again at the e toll used as evidence of the ‘crash convoy’). A Hertz rented car a few junctions later at the red cow hit the other privately owned car, a Citroen C2 with a few passengers in both cars for good measure.

These alleged fraudsters are clearly novice ‘chancers’ and dropped all personal injury claims after the insurance company for Hertz outlaid considerable expense & time to a private investigator which allowed the insurance companies loss adjuster & solicitors to call a spade, a spade. Presented for the judge with a case wrapped in a bow & open and shut.
Also mentioned in the Sun’s news story [read more here : ] was that the presiding judge Groark’s ruling awarding accident investigation fees (quantified at €14,000) a file of the case / claim is being referred to the Gardai and DPP for further investigation.
The professional gangs that make a living at crash for cash scams fly into Europe’s high payout ‘honey pot’ insurance countries of which Ireland is up in the top 5, these practiced crews are not ‘chancers’ and stage all types of complex claims which either come before the court and eye watering sums of money are paid out, or, as I recently heard on a Newstalk radio interview PI accident claimants appear on the given court date for their case and the defendant insurance company’s (usually some large underwriter of insurance policies like RSA or Liberty, etc.) are present at court with a team of very expensive legal counsel & solicitors who have a look in to see which judge is hearing cases before that court sitting on the day and if it’s a certain few judges they call for immediate mediation & settlement. Cutting their clients losses and seeking to win by way of a fixed outlay rather than face a judge who’s known for sympathetic scales of payouts.
We can only speculate the outlay that insurance companies & underwriters expend on fraudulent claims, semi fraudulent ‘padded’ claim declarations and investigation fees both in house by claims handlers, loss adjusters and external investigation firms.
Some companies disclose the cost for claims in the three F’s category – False, Fake, Fraudulent but it’s difficult to fully believe or quantify the scale of these costs declared by an insurer as they are costs & figures put forward or tabled to justify exorbitant premium hikes and I would consider it to be fair conjecture that they (the insurance companies) are doing a little ‘padding out’ or rounding up of the figures to try and use math to manipulate the numbers to their advantage and soften the blow of a premium increase of 50, 100 or 150% to policy holders, paying premiums year in year out.
You can pick up at story every day in the news cycle about SMEs and businesses of all types being forced to close or reduce services and increase costs to the end user because of hikes in cover. So why are your premiums so high or you can no longer find cover? My article is just a snippet of the stories of late – How or who can fix this problem? Or should I say series of layered problems?

My next post will be a starting point: – the history of insurance internationally & in Ireland. Looking to the past to give good insight & to follow some insight from within the industry with John Mannion of Claims Assist Ireland,
Leading insurance loss assessors nationwide and John’s unique perspective from day to day dealing with insurance companies, the insured & all the peripheral companies and professionals that play a part in insurance claims – from the loss adjusters, the solicitors, contractors, engineers & consultants.

We know the problems with insurance in Ireland in 2019 and getting cover, how can mistakes of the past combined with technology and out of the box thinking and solutions provide an equal and fair system that offers protection to those that have legitimate claims, strong enough deterrents to those that would falsify or submit fraudulent claims – with some simple technological applications to level the playing field.

Author – M. Fleming

Works Cited
Gary Meneely. “BIG MAC & LIES.”
Irish News, 22 March 2018
The Irish Sun

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