I am grateful for the opportunity to address the committee. Because it is ten years on, I thank politicians for the cross-party support, which was fundamental; the board, including Ms Dowling and Mr. O'Toole, who have travelled with us on a robust journey; the executive who are present in the Gallery and our staff. It has been truly a combined effort to reach today.
I would like to talk about the context we have emerged from, our results, the impact on society, the reform agenda, which is the at the centre of all the Government is looking at currently, citizen-specific impacts and how to harness organisational capacity and capability for the good of the Exchequer, the taxpayer and society at large.
The board was established ten years ago. It was many years in the making. There was a joint Oireachtas committee report in 1986, a Deloitte & Touche report in 1996 and the MIAB report in 2002, which Ms Dowling chaired. We had cross-party political support. The proposals that were made were seen as sensible and that has proven to be the case. This is recognised today.
Our function is quite different from the State Claims Agency which is a respondent to any claim. We are a quasi-judicial entity akin to the Courts Service. Our specific work is in the delivery of personal injury awards and our mandate was to lower the handling costs, reduce delivery timelines and ensure consumers received the same level of award. We have removed cases from costly litigation which was the key driver of insurance prices and the closure of businesses at the time. The six o'clock news was awash with stories of various businesses closing down because of the cost of insurance just ten years ago. It is important to understand that personal injury claims which have a higher value but the volume of which has lowered, drives the cost of insurance premia rather than, say, the higher volume of property damage claims.
With regard to results, we have made 70,000 awards to date amounting to €1.5 billion in compensation to citizens. The highest award was in excess of €1 million and there is no ceiling to the award we can make. Our timeline for cases is 7.3 months and the legislation requires a nine-month turnaround.
When we opened our doors, it took on average three years from the date a writ issued to somebody receiving compensation. The awards are consistent and we follow a book of quantum, which is reflective of court awards. We continue to get feeds from court data to ensure ongoing consistency. There has been direct savings of €500 million in cases that go as far as a formal award. However, we opened a service centre operating between 8 a.m. and 8 p.m. and we facilitate and support further claims which conservatively deliver savings of another €500 million. That gives a total saving of €1 billion over the ten years.
Our delivery costs are less than 8% of any award we make. Litigation costs at the time we opened were 46% and today run at 58%.
I refer to the impact on society. We deliver the same level of awards as the courts. We are faster than them and we are more effective in delivering these particular type of claims, which are assessment claims. Dispute claims remain within the court system. We have worked hand in glove with the court system to ensure it can deal with contested cases and clear courts for other activities. We have reduced our processing fee. At one stage it was €1,050 but it is now a flat fee of €600 per case. We have reduced the demand on court services and allowed the court rooms and the Judiciary the capacity to hear other cases. We allow people to return to work faster, rehabilitate faster and to contribute to the economy. There is less strain on medical services. Over a three year period on average there were repeat medicals at least every six months but that does not happen anymore. People can process their claims directly with the board or go through a third party but we do not pay legal fees by and large unless a legal issue arises. This is not a legal system; this is an administrative process. Car insurance costs in terms of asset results are down 40% according to the CSO.
With regard to reform initiatives, we have also looked outside the board and we have contributed and participated in the call for reform across the public sector. State employees who were involved in motor accidents and had their salaries paid were not required to include that in their claim for recoupment from the offending party as happens as part of people's contracts in the private sector but that is happening now. There was also no requirement for welfare benefits paid to accident victims to be part of the insurance claim and recouped to the State but that is now required. We are in the process of completing a significant framework tender for back office administration services, document management, financial transactions, medical appointments, registration of claims and other initiatives - high volume, high value triage activities. The framework will not only be open to this board but also to every other State agency. We believe this is true efficiency. There are other pending reform initiatives. We are drawing up a tender in association with the Garda to source general practitioner services.
We are considering a framework tender for medical consultants and very open to working with other entities across the State in driving value and reducing the need for repeated tenders.
With regard to medical negligence cases, we obviously believe there is potential for significant savings, with some €600 million standing in reserves in the State Claims Agency.
On a specific delivery for the citizen, the cost of insurance premiums has reduced. Therefore, if one runs a business or insures one's car or any product bought over the counter, the cost of insurance runs through it. There is no requirement to have an adversarial system. The book of quantum ensures predictability and consistency. From a public interest perspective, we have made many public interest comments on claims harvesting which is being promoted by a number of entities in the public arena in order to promote claims. Obviously, members will have heard our views in that regard. The insurance industry is stating there is a case for increasing the cost of insurance premiums in the State, but we cannot see the need. The industry is on record time and again, through the Irish Insurance Federation, as implying it is the cost of personal injury claims that drives premium costs. If we are reducing the cost of processing — in fact, there is an increase in the volume of claims — we cannot see a case for increasing insurance premium costs.
The board is open from 8 a.m. until 8 p.m. and people may talk to or correspond with it. Obviously, the website is available for 24 hours a day. We have online application forms and launched an app. There is no need for third party representation which adds to the cost of the process. There is no representation during the process. There are no oral hearings, nor is there a mounting of the case. We focus on the facts, medical evidence, invoices and bills, which is what drives an award.
We have a very high customer satisfaction rating. All of our e-services have been in development in recent years. We have a plain language website and a list of frequently asked questions. We also present a variety of case studies. For 2014 we plan to develop a number of portals for those who are doing business with us, through which one can gain access and deliver information.
How have we created this capacity and model? From day one, we segmented core and non-core activities and outsourced. The initiative to which I refer is another to which we have been contributing across the public service in regard to the capacity of the service to outsource more, where appropriate. This allows for a focus on core activities and, of course, one to drive quality. When one keeps the core activities in-house and uses one's technical experts to focus on these activities rather than having them chase paper, telephone calls or general queries, it allows one to meet that objective. One of the key deliverables of the board was outsourcing from day one. This system offers scalability, flexibility and capacity and keeps fixed overheads to a minimum. We have specific capability in respect of outsourced service provision and can take on more work. Our self-funding model obviously speaks for itself. When we opened the doors of the injuries board, we had a set-up grant from the Department of Jobs, Enterprise and Innovation. We paid it back with a cheque of some €7 million just two years ago. The board is entirely self-funding and on a sustainable basis. We can now say that with confidence ten years on. As for the future, the State should be considering more redress schemes, employing a non-adversarial model.
With regard to insurance, there should be greater transparency associated with the data insurance companies provide for the State, customers and shareholders as they consider their options.
