On-trade

Central Bank extending National Claims Information Database to EI & PLI

The Central Bank has published a study on the merits and feasibility of including data on Employers’ and Public Liability insurance in the scope of the National Claims Information Database.

It has found merit in extending the scope of the NCID to include Enployers’ Liabiliity and Public Liability data and believes it feasible to do so albeit with a gradual “incremental” approach to data collection.

“The Central Bank is focused on ensuring that the insurance sector sustainably serves the needs of the economy and its customers,” said Mark Cassidy, Director of Economics & Statistics at the Central Bank, speaking about the publication of the feasibility study, “Credible, publicly-available data in relation to Employers’ and Public Liability insurance would benefit all stakeholders in the insurance market and we intend to publish this data as soon as possible.

“It’s clear from our study that there is currently a lack of publicly-available data in relation to the claims costs and trends for EL and PL insurance. This deficit of data in this area does not allow conclusions to be drawn as to the causes of underlying trends in the EL and PL insurance market. This limits the ability to determine appropriate policy responses to address the issues in this area.”

Liability insurance consists of a broad range of business sectors and this increases the complexity of data collection. The Central Bank intends to collect this data in H2 2020 and publish the first Employers’ Liability and Public Liability NCID Report in H1 2021 with annual publications of data thereafter.

The final report will focus on data prior to and including 2019. Aggregate data on premiums, claims and settlement costs will be published as part of the Report.

In December 2019, the Central Bank published the first annual Motor Insurance Report of the NCID, which provided detailed data on the cost of motor insurance premiums, claims and settlement costs. The Central Bank believes that this work, combined with the Employers’ and Public Liability NCID report, will deliver on a key Central Bank commitment to improve transparency and the understanding of the issues affecting the functioning of the insurance market in Ireland.

But the Alliance for Insurance Reform has two major problems regarding the proposed report as well as broader transparency issues regarding the insurance industry.

 

Alliance for Insurance Reform response

Firstly, the NCID Liability report was scheduled for publication during 2020, according to Alliance Director Peter Boland who stated that, “The pushing-out of the publication to the first half of 2021, over three years after it was first mooted by the Cost of Insurance Working Group, represents a major setback for policyholders.

“Secondly, there’s no mention at all in today’s study of insurers’ Income & Expenditure data as was provided in the NCID Private Motor Insurance report. It will not be possible to draw any meaningful conclusions on the state of the liability insurance market in Ireland unless at least 10 years of I&E data is supplied.

“On the broader issue of transparency, policyholders are either legally or morally obliged to have insurance. The working assumption is that the State will then supervise the industry to ensure that vested interests do not exploit this obligation. However you cannot supervise a sector in any meaningful way if you do not have the data to do so. It’s astonishing how little transparency exists in such a systemically important industry and this latest delay further illustrates how little the State has done in this regard since the insurance crisis emerged.”

Other than the NCID Liability report, the AIR provides examples of key transparency measures not delivered or partially delivered.

These include:

 

  • the long-promised Key Information Report on Liability Insurance which is now further delayed with no sign of a due date, currently 16 months overdue
  • the Insurance Fraud Database, using Insurance Ireland’s InsuranceLink, is further delayed and is now over a year overdue while the mention of an independent body to manage InsuranceLink has been dropped in the latest CIWG update “so we fear that this project is going backwards”
  • there has been no concrete progress on a proposed CSO liability insurance index
  • the NCID private motor insurance report was at best partial, with only one year of insurers’ income & expenditure data whereas at least 10 years’ Income & Expenditure data is needed to draw meaningful conclusions in an industry as cyclical as insurance, states the Alliance.

 

“It’s hard not to draw the conclusion at this stage that vested interests are dragging their heels,” said Peter Boland, referring to comments by the Minister of State at the Department of Finance Michael D’Arcy recently that, “The requested data has not been provided by Insurance Ireland for the Key Information Report that was due in December 2018”.

As a result, Peter Boland concluded, “The Government and the Central Bank have been culpable in drawing a veil of secrecy over the liability insurance market since the Central Bank abolished the Blue Book in 2015. While the partial NCID private motor insurance report exposed some inconvenient truths about the money being made out of the insurance crisis by insurers and lawyers, we continue to have no transparency on liability insurance, leaving policyholders at the mercy of insurers and lawyers. Businesses continue to close down; community, voluntary, arts & cultural, sports and charity organisations continue to suffer and recovery post-Covid-19 will be all the more difficult if this situation continues.”

 

“While the partial NCID private motor insurance report exposed some inconvenient truths about the money being made out of the insurance crisis by insurers and lawyers, we continue to have no transparency on liability insurance, leaving policyholders at the mercy of insurers and lawyers,” says Peter Boland.

“While the partial NCID private motor insurance report exposed some inconvenient truths about the money being made out of the insurance crisis by insurers and lawyers, we continue to have no transparency on liability insurance, leaving policyholders at the mercy of insurers and lawyers,” says Peter Boland.

 

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