Aviva Insurance Ireland DAC (Aviva) today announced that it paid out €223 million in claims to its general insurance customers and third-party claimants in 2022, an increase of just over 10% (€200 million) on the previous year. The company reported that it paid almost 99% of claims that were finalised during the period. The increase in claims costs was driven by a number of factors:
- Property damage - overall payments on these claims increased by 8%. A number of large fire losses and the impact of inflation on the cost of materials and labour were the main contributors to the increase. Claims caused by break-ins and theft rose by 43% on the previous year, perhaps reflecting an increase in properties vacant during the day following the return to work post the pandemic.
- On the motor side, there was an 18% increase in the volume of motor damage claims, with values also growing by 13%. This was in part attributable to a return to higher volumes of traffic post-Covid but also due to inflation in the cost of vehicle parts and labour, delays in obtaining parts and the stressed second-hand car market.
- The total amount spent on injury claims reduced by 2.4% on 2021 reflecting the fact that the majority of payments related to claims pursued through the courts system which had accident dates before April 2021 when the new injury guidelines were introduced.
The value of any general insurance policy, whether it covers an individual or their properties, including their homes, business, or motor, only becomes apparent to customers when they need to make a claim. There has been increased focus on insurance companies in the ongoing debate on the need to reduce the cost of personal injury claims and the degree to which insurers are focused on their customers genuine needs. From an insurers’ perspective, each claim provides us with an opportunity to provide an excellent service to our customers when they need us most. We have a team of professionals who work hard to make this process as straightforward as we can for our customers.Brian O’Connor, Chief Claims Officer at Aviva
Whilst Aviva has seen some cost benefits from the government’s Action Plan for Insurance Reform, most of the personal injury claims paid out in 2022 were still assessed under the old guideline values. It is reasonable to suggest that a more cohesive commitment to reducing the cost of personal injury claims must be achieved from all interested parties as we continue to give significantly higher minor injury awards than our nearest neighbours in the UK and other European countries. The average number of rejections of assessments made by the Personal Injuries Assessment Board (PIAB) since the new guidelines came into force in April 2021 have increased from 50% to 61%*. Savings arising from the new guidelines are being eroded due to the lower acceptance rates of awards in PIAB, and the increased volumes of cases moving to litigation where they have seen significant inflation in legal costs. A key objective of the Action Plan for Injury Reform was to reduce litigation, but we are seeing the opposite.Brian O’Connor, Chief Claims Officer at Aviva
“Motor insurance premiums were down 9% last year and 40% from the peak prices in 2016. In addition, we have invested significant resources, both human and financial to stem the growth in the level and frequency of fraudulent claims that we are seeing in the system. This includes a network of some 50 colleagues with relevant experience who are contracted to work with us on investigating cases as well as experienced claims handlers dedicated to identifying and fighting fraud. Our policy in this regard is that, where we suspect or have determined that a claim is fraudulent, we will fight that claim, up to and including in the courts.
“We will continue to pay all genuine claims, and will continue to advocate for claims reform, support government reforms and the PIAB process. The latter provides an independent, professional, fast, and easily accessible way for claimants, particularly for those who do not have complex claims to receive fair compensation without the delays and expense of the court process”, concluded Brian O’Connor.