Pressure on insurers to cut premiums after average injuries payout falls by 40pc

The Personal Injuries Assessment Board (PIAB) said that, in the five months after the introduction of new injuries guidelines, award levels are down by 40pc on those paid out last year. The new guidelines were agreed by judges.

Insurance companies claim that premiums have been falling, but the latest data is set to lead to policyholders seeking even deeper drops in premium costs.

PIAB was put in place to settle claims without the need to incur legal costs.

All personal injury claims have to go through it, but if a settlement is not accepted it can end up in court, or be settled privately by insurers.

Around 14pc of injury claims are settled by the State body. A third are settled through litigation, with half settled directly by insurers.

The latest PIAB report shows award values for injuries have fallen sharply following implementation of new Judicial Council Guidelines at the start of the year.

Almost half of PIAB awards are now under €10,000, the board said.

The report, covering the period from April when the new guidelines came into effect, found that 18pc of awards are now under €5,000.

Almost a third are between €5,000 and €10,000.

This means that nearly half of claims are now under €10,000, compared with just 12pc of awards previously.

Average awards by PIAB reduced significantly following the introduction of the new guidelines up to the end of September, from €23,877 to €14,233. This is a reduction of almost €10,000 per award.

This level of reduction equates to a total reduction in award values over this period of €25.6m, according to Rosalind Carroll, chief executive of the PIAB.

The report is the first official publication on average award levels since the introduction of the new guidelines and is based on more than 2,600 assessed claims.

Ms Carroll said: “While the guidelines are still relatively new, this is still a significant cohort of cases and it does indicate a significant decrease in average awards.”

The average motor injury award is down €9,000 to €13,200.

For public liability, award levels have dived by €10,000 to €16,000 on average.

Employers’ liability average awards are down €13,400 to €17,000.

However, there has been a drop in the rate of acceptance of PIAB awards by claimants and their solicitors, with the current rate at 41pc. Traditionally, claimant acceptance of awards was over 50pc.

Ms Carroll said: “As the cost of personal injury claims has been reported as an important factor in the price and availability of insurance, this report is good news for individuals, communities, and businesses who pay for insurance and ultimately for society.”

She said it will take time for the full effects of the lower award levels to take effect, particularly in respect of savings in legal costs and litigation.

The latest inflation figures show that motor premiums fell by 7.8pc in the year to August.

Peter Boland of the Alliance for Insurance Reform welcomed the report.

But it will be of no value unless it leads to reductions in premiums, he said.