“…the more granular the data requested, the greater the logistical problems and cost associated with extracting the data from a multiplicity of insurers’ IT systems.”
Responding to a public consultation by Ireland’s Department of Finance on the Central Bank (National Claims Information Database) Bill 2017, Insurance Ireland has expressed its support for the proposed establishment of the database but has also sounded alarm bells. It believes non-claims information should not be collected.
“The NCID will be of significant help to policymakers in helping them to identify claims trends, particularly personal injury claims trends, and frame legislation/regulation,” Insurance Ireland said in its response published by the department on April 13. “We do not believe we should be distracted from the objective of identifying and addressing claims trends by including non-claims information in the database.”
The trade body cited possible implications if the legislation goes beyond what was recommended by the Cost of Insurance Working Group Report. Aside from the logistical problems and costs mentioned above, Insurance Ireland warned of the potential impact to market competition.
“If the exercise is too complex, a requirement on insurers to provide data to the NCID may create a potential entry barrier to the market as foreign Freedom of Services (FOS) insurers may see it as cost-prohibitive to develop systems to service their non-core market,” it said. “Equally, creating a minimum threshold of premium income or other measure before the requirement to supply complex data applies, would result in insurers below the threshold being subject to less requirements. This would create an unfair competitive advantage in breach of competition law.”
The response also mentioned “scope creep,” or the changes or expansion in scope in an initiative or project.
“Insurance Ireland supports the establishment of an NCID on the basis that we believe it has the potential to be a valuable tool in providing information on motor claims trends for the benefit of insurers, consumers, and policyholders alike,” said the association. “We are concerned that the success of the NCID may be jeopardised by ‘scope creep’ in the form of a temptation to include non-claims information and excessively granular claims data.
“Finally, our view is that an NCID built on the basis of incremental success is more likely to succeed than an NCID which commences with an over-ambitious approach that risks early failure.”
