Law Society director general Ken Murphy has noted his astonishment at the huge pre-tax profits of insurance companies as premiums continue to spiral for the ordinary motorist.
His remarks came as FBD Holdings said it planned to more than double its shareholder dividend, releasing tens of millions in unused claims reserves.
The insurance industry is simultaneously calling for a reduction in pay-outs to personal injury victims, the Law Society boss pointed out.
“Insurance companies are making enormous profits while Irish businesses – by FBD’s own admission – are struggling to pay the huge premiums insurance companies are setting and, in some cases, cannot get insured at all. How can this be the case?”
“FBD, and the insurance industry as a whole, have a lot of questions to answer,” he said.
“The Law Society has continuously warned that simply reducing the compensation awards paid to victims of injury will only serve to boost the earnings of already hugely profitable insurance companies. I think today’s [28 February] results and comments from FBD are clear evidence of that fact.”
“The bottom line is that there is absolutely no evidence that reducing damages will result in lower premiums. The effect of reducing damages will merely be to take from the pockets of injured victims of negligence in order to line the pockets of an increasingly profitable insurance industry,” Ken Murphy concluded.