Aviva Chief ‘Dismayed’ by Plan to Raise Personal Injury Payout Levels

The head of Aviva Insurance Ireland has urged the Government to reject a draft proposal to the Judicial Council that would raise the guidelines for personal injury award payouts, claiming it would undo a decade of reforms.

Aviva Insurance Ireland CEO Declan O’Rourke states that Aviva’s average prices for motor insurance in Ireland are lower than they were in 2017 and lower than in the UK. The insurer had responded to the Government Action Plan for Insurance Reform by entering new sectors and launching new products.

That progress will be called into question if the recommended level of payouts is raised, he cautioned.

“We support proportionate compensation for those injured and pay all covered claims as quickly as possible, but Ireland’s awards for minor injuries are already many multiples of awards in both the EU and UK. We believe an increase of this magnitude at this time is not in the best interest of society as a whole and will reverse the positive impact of the decade long government action plan for reform,” he said.

The Judicial Council, which is comprised of all the State’s judges, has proposed a 16.7% increase in recommended award levels for personal injuries, which they say accounts for inflation.

If the Government accepts the recommendation, judges will have to consider the guidelines when deciding awards and must provide reasons for any departure from them.

A 16.7% increase would bring the maximum award under the 2021 guidelines, which was £550,000, up to about £642,000.

Aviva says that Government should instead implement the Action Plan for Insurance Reform recommendation to set legal cost scales for personal injury and pursue other measures to keep more cases out of the courts.

“To maintain progress, we urge government to implement the Action Plan recommendation to set legal cost scales for personal injury. We also urge government to work to reduce the plaintiff rejection rate in the Injuries Resolution Board, and to introduce Pre-Action Protocols to ensure more cases resolve without the need for costly litigation and long delays for all parties,” Declan O’Rourke said.

He was commenting after Aviva’s general insurance business in Ireland reported financial results for 2024. Its undiscounted Combined Operating Ratio (COR), their key measure of profitability in general insurance, improved to 94.8p. Operating profit of €73m was slightly up from €72m in 2023.

Aviva’s gross written premiums increased 12% to €584m, due to strong growth in both personal and commercial lines business.​​​​​​​​​​​​​​​​