Supermac’s boss Pat McDonagh has accused the insurance industry of “holding the country to ransom”.

He’s calling for a statutory inquiry, wondering why premiums keep going up-even though insurance claims are actually going down?

“I was just looking at a survey done by the Alliance for Insurance Reform there recently, and I think 74% of respondents have noticed that their premiums have increased,” Mr McDonagh told Lunchtime Live.

“Whereas 14% of them said it had decreased, and the balance said it was the same as last year.

“So, there hasn’t been any dramatic decrease in premiums across the country, and I suppose the question that needs to be answered is why is that so?”

When it comes to personal injury claims, the number of reports filed fell by 40% between 2019 and 2023, despite prices for businesses continuing to rise.

“The question needs to be asked more rigidly as to where are the profits going or why haven’t premiums come down?” Mr McDonagh said.

“The two main beneficiaries of it, in my opinion, are the insurance companies and the legal profession."

Hands with 100 Euro banknotes, which are counted and put on a table. Image: Klaus Ohlenschlaeger / Alamy. 5 January 2018

CEO of Insurance Ireland Moyagh Murdock agreed that Ireland has “a challenging insurance market”, but said that in her view, this is down the the cost of litigation and awards.

“Everybody should be compensated for a genuine injury or an accident,” she said.

“But we pay out much bigger awards than anywhere else in Europe [or] than our neighbours in the UK.

“Unfortunately, the policy holders and the insurance companies are having to pick that up.

“So, until we get European awards, we will not see that level of premium in this country.”

'Burning taxpayers money'

Ms Murdock also said the Judicial Council’s recent recommendation that “the already extremely generous awards go up a further 16.7%” was “without any justification”.

According to Ms Murdock, a public inquiry would only add “significant legal costs into an already very expensive system”.

She said the Central Bank already performs “very detailed analysis twice a year”, and “we would only be burning taxpayers money if we try and do any more than that”.

Ms Murdock said the focus should instead be on the level of damage claims awarded to complainants.

Main image: 15 August 2017; Pat McDonagh at the Loughrea Hotel & Spa in Loughrea, Co Galway. Photo by David Maher/Sportsfile