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THE GOVERNMENT HAS admitted that it has limited options to help secure the future of the Irish leisure industry, after insurance provider Leisure Insure announced that it was withdrawing from the Irish market.
The UK-based provider announced last week that it would no longer be offering insurance to Irish businesses and from August it will honour, but not renew, current policies.
The decision has caused shock in the leisure sector, which has struggled in recent years to afford insurance – especially in an Irish insurance industry that has typically been unenthusiastic about offering insurance to such companies.
Brendan Kenny, the CEO of Ireland’s Association for Adventure Tourism, called the decision “another blow to the leisure sector”.
The move has had a “big impact” on the association’s members, he said. At least two businesses, Kenny said, were worried that the withdrawal of Leisure Insure could force their business to close.
In a statement to TheJournal.ie, a spokesperson for the Department of Finance said that Brexit was the primary reason Leisure Insure had decided to leave Ireland.
Minister of State in the Department of Finance Michael D’Arcy had spoken with AXA XL, the underwriter of Leisure Insurance, to discuss the issue.
The minister, the spokesperson said, “acknowledges that the level of awards and the inconsistency in such awards is undoubtedly a factor in Leisure Insure’s decision not to continue in the Irish market”.
“There is unfortunately no single policy or legislative initiative which the Government can take to persuade insurers to provide cover to the leisure sector as it would appear that insurers have not had a positive experience with this sector over the last number of years,” the spokesperson added.
“The Government is constrained as to what it can do as for constitutional reasons, it cannot direct the courts as to the award levels that should be applied, and for legal reasons it cannot direct insurance companies as to the pricing level which they should apply in respect of consumers or businesses seeking insurance.”
The government’s main hope is that the Judicial Council Bill, which has passed through the Oireachtas and will become soon become legislation, might in the future produce guidelines on personal injury award levels and subsequently lower the costs involved in personal injury claims.
The government, the spokesperson said, is “doing everything it can to improve the environment within which insurers operate”.
‘Crisis’
“If we don’t have insurance, we don’t operate. If insurance is too high, we don’t operate,” Derek Binchy from Fota Island Adventure told TheJournal.ie.
Binchy, who employs 15 people during peak season, said his insurance will run out on 31 August. After several years with Leisure Insure, Binchy doesn’t think it’ll be “easy” to find a new insurance provider.
He has until 31 August to find a new provider – if there isn’t a provider in place by then, he said, his business won’t be able to open.
The news has triggered calls for the government to step in. Michael McGrath, Fianna Fáil’s finance spokesperson, called on the government to hold an emergency meeting with the insurance industry.
“We are facing a full blown insurance crisis with thousands of jobs immediately on the line,” McGrath said.
“The simple fact is that public liability insurance for the leisure industry is not an attractive business. Not one of the main insurers in the Irish market will provide cover to parts of the leisure industry,” he added.
Speaking on RTÉ Radio One’s Today with Miriam O’Callaghan programme, Linda Murray, the Director of Alliance for Insurance Reform, said the news was ”the biggest blow we could have got in the leisure industry in Ireland”.
While she acknowledged that reforms were taking place to reduce personal injuries claims, Murray said “urgent” changes to compensation payments were needed to attract European insurance companies to Ireland.
“If they saw we had this reform as a matter of urgency they’d be much more likely to come into our country and insure us,” she said.
Gerry Frawley, Head of the Irish Inflatable Hirers Federation, echoed these concerns when he spoke on the same programme. ”Being insured is fundamental to any business and without insurance it is definitely a bad situation,” he warned.
Frawley warned the lack of alternatives could force companies to risk operating without insurance and called on the government to take action.
“Politicians need to do something. Varadkar said that he likes people who get up in the morning and I tell you there’s no better people than bouncy castle people at communion time to be running around at 6am and 10pm at night.”
“They deserve not to be abandoned in this situation,” he added.
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So they waited until entire industries are on the verge of collapse before even attempting to address the compo culture people have been complaining about for years. And not hard to see why foreign insurers don’t take their plans seriously when a member of the government tried to scam public liability insurance and has faced no consequences once caught.
@winston smith: there is no compo culture despite the industry spin, there is millions of euro profit being made though
@Thomas Maher: is it just too profitable so they have decided to walk away from it?
@Thomas Maher: there is a compo culture that’s why insurance premiums are so high.
How many millions of profit is irrelevant. Many business models including insurance companies will aim to make between 10%-15% return per annum on total capital invested.
It’s simple maths for the insurance companies. The more paid out in claims the higher the premiums for everyone else.
@Neville Bartos: According to PIAB Annual Report 2018,since they were set up in 2004 they have assessed 130,000 claims….that is just .18 % of the population,that shatters all spin about a ‘compo cuture’!!
@Neville Bartos: on that annoying tv ad about insurance fraud it says our premiums are up to 50 euro higher due to fraudulent claims- you know what 50 euro isnt much when your paying 1400 for insurance where the f%$k does the rest of the money go
@Nuala Mc Namara: the PIAB is the first port of call for someone looking for some compo.
The PIAB will only look at the case if the defendant agrees they assess it otherwise it goes to court.
Even if the defendant agrees and the PIAB make an assessment of damages both parties need to agree or it will still go to court.
Once it goes to court the insurance companies will moves to potentially settle the case or it will be adjudicated in by a judge. That’s where the large payouts are occurring.
@Thomas Maher: stop sniffing the tipped. The comi culture is huge. You must have mAde a few claims and are a bit worried
@Damo: yep to rent an office in Dublin costs approx €1.5 million per 100 employees you have and wages and social insurance, pension costs etc would be approx €6 million per 100 employees you have and then all other running costs from marketing, office supplies, insurance, legal, compliance, regulatory, IT, security, audit etc all up to huge cost before you pay out one cent in compo.
To use your example €700 of your premium is used to cover day to day running and €700 is used to pay claims. A €50 increase is appro. 8% on €700 and that sounds about right that around 10% of claims are pure fraud
@Damo: yep to rent an office in Dublin costs approx €1.5 million per 100 employees you have and wages and social insurance, pension costs etc would be approx €6 million per 100 employees you have and then all other running costs from marketing, office supplies, insurance, legal, compliance, regulatory, IT, security, audit etc all up to huge cost before you pay out one cent in compo.
To use your example €700 of your premium is used to cover day to day running and €700 is used to pay claims. A €50 increase is approx. 8% on €700 and that sounds about right that around 10% of claims are pure fraud
@Neville Bartos: Yes the PIAB is the independent statutory body that deals with personal injury claims and all personal injury claims must go through the PIAB first.Yes,if respondent doesn’t agree with PIAB’s assessment of injuries then it must proceed to court.
There is under Section 14 of the PIAB Act where it shows that PIAB has discretion to assess the claim by default!
@Thomas Maher: I think theres a bit of both to be fair Thomas – excessive profiteering from insurance companies and people quick to run to the courts for claims that are a one way bet – no consequences or costs if a claim fails – the dogs on the street have known for a long time we have a problem – the Supermacs owner had cctv images of scammers throwing water on floors more than 10 years ago – there have been raids by the EU commission to investigate potential cartel practices and we pay out pon average 4 times more per claim than the UK for small injury claims and we have businesses facing a reality that cover is just excessive or increasingly not available – we don’t need endless pontificating and finger pointing or BS reports to be commissioned – we need a government to take corrective action and try address the problem -most other EU countries local governments try address the problems facing their individual countries – we have a bunch of spin doctors that want to be populist and see what way the wind blows on any item in the popularity polls – well the Cahill 60K claim hurt them last time in the locals and their failure on this issue will cost this government dearly ( both FG/FG ) if they can’t get their sh*t together and address the problem with some solutions. We can pull late night emergency meetings when banks are going bust and find solutions – time to show we can take action for other sectors that affects most people living in Ireland one way or another.
The legal profession is like a millstone around Irish industry, and no government has the bals to take them on!
@Josh Hanners: the neck of
The Governments hands seem to be permanently tied except when it comes time to bring in new taxes and charges.
There hands are not tied they have funding that was promised by the Insurance companies to set up a specific independent Garda unit to go after fraud. I recently read of a a woman who had three previous claims against a local council as the Judge threw the fourth out of court. Have you ever seen an actual prosecution for Insurance fraud?
@Daithi Ó Raghallaigh: we need a dedicated fraud unit to prosecute Alan Farrell and others for their corrupt behaviour as legislators.
Underwrite the sector itself.
Form a company aka Nama.
No need for businesses to go to the wall.
@Camacsaint: u mean like PMPS
@Camacsaint: PMPA
@John Horan: a well run government company with no interference from the banks(they own all the insurance copanies) would be a better option than the rip off thats going on. More copanies are closing every day because of extortion by these bank owned insurance companies.
@Thomas Roche: you mean a state monopoly
@Thomas Roche: I wouldn’t trust the govt to run a bath.
@Thomas Roche:
Can you give me some examples of a well run government company?
I worked in a semi state for 16 years. It’s taxpayers money so no one cares how much they lose. No matter how bad you are you can’t be sacked.
We might have cheaper premiums but the taxpayers would be picking up the tab in the inevitable subsidy to run the business.
@Patrick Nolan: i am sure there would also be a problem with state aid or competition laws too if we set up a govt run alternative – maybe the solution is that instead of allowing the big insurance operators license to come in and cherry pick only the profitable easy low hanging fruit sectors that they can be forced to offer cover in other less profitable sectors – nobody is saying you cannot come to ireland and profits but how about if you come to ireland and make such excessive profits we could force them to have to cover less profitable sectors like leisure etc …..plus how come the single market of 500 million people in the EU that we keep getting told is amazeballs cannot be used for the principle of insurance – ie it shoulldnt matter to Zurich or Allianz if the car they cover is in berlin paris or dublin – ireland is paying more per policy and its BS.
Truth is the govs hands are only tied when it suits the gov. Gov are happy with higher insurance costs.
Will FFG step in? Not if they tread on the toes of big business they won’t.
What in the constitution prevents them from setting out limits on what people should be awarded?
@Darren Byrne: What in the constitution prevents them setting out limits on what people should be charged?
@Darren Byrne: Separation of the Executive from the Judicary, There can’t be political influence in the administration of Justice
@Darren Byrne: Judiciary has to be independent of government as per the constitution.
@Dan Morgan: so how are they allowed set maximum sentences for crimes
Government are mouthing BS regarding their hands been tied . If there’s a loop hole in the tax system it would be plugged over night. This is more to do with their friendship of friends in high places and not rock the privatisation boat.
We should scrap all insurance, have state own insurance, we all pay in simlar to the UK NHS. Which would mean from public parks, to cars , cyclists, public transport/buildings to private own we be insured under one.
From business to private individuals we would save on yearly premiums. In turn saving on services and our own pockets.
@Life is short enjoy it: then there will be no incentive not to claim. Little scratch on your car that u did yourself…claim away as your premium will be unaffected
@John Horan: or could be limited to certain types of claims for excess you could buy.
Simlar to how car insurance works in South Africa
“Hands tied…”!
They mustn’t be bound very tightly, because they seem to be able to plunge them quite deeply into our pockets and extricate the hard earned contents with amazing dexterity.
@ᎶᗩᒪᒪᎬᖇᎽ & ᗰᑌsᎬᑌᗰ ᑭᖇᎾ-ᒪᎥᖴᎬ sᏆᗩᖴᖴ Ꭵᑎ IᖇᎬᒪᗩᑎᗪ: please explain your name I’m interested
@Conor Thorne: Hi Conor. Thank you for your query. We are exactly what it ‘says on the tin’. We’re an ecletic bunch of misfits, ungainfully employed, or volunteering in the Heritage sector (Public and Private). The divisive issue of #abortion has polarised this sector like many others, hence we are the outnumbered Pro-Life stalwarts. I hope that rant has’t generated more questions than it has addressed!
The timing is rather strange after Pearce Doherty’s beating last week ! There’s a bigger picture here altogether !
Use the taxes from the industry, to insure it. Set up a board not filled with appointed family members or buddies to set realistic claims, if not accepted then go to the courts…
@Dave Walsh: settle…
So Brexit is to blame…..now where have I heard that excuse before…
I’ve never known of a government as open and vocal about how little they can do. Banking, crime, housing, health. Nothing.
Absolutely 0 representation on behalf of the people, just excuses. Overpaid excuses.
Its about time the people of this country went out full force in protest at the whole gravy train culture our business leaders feel entitked to. Banks, insurers,solictors,politicians cicil servants et al. When will we have taken enoigh if the greed
What a pile of BS if you ask me
Payouts are so lucrative that ‘everyone’ is tryjng it on. No new insurer would bother coming into the Irish mkt and face excessive payouts being made against them. The bumper payouts need to be tackled…..along with all those obvious scams etc
@Aire Dezamba: if someone has even a minor accident it’s like they’ve won the Lotto.
easy peasy, judicial reform, stop the ridiculous claims and payouts.
1) prosecute false claimants
2) give much lower figures to legit claimants
3)disbar corrupt solicitors
4 ) sack incompetent judges
Problem solved
@Conor Thorne: limit legal aid (to say) one claim every 5 years maximum – that would stop a lot of these alleged ‘false claims ‘ by multiple claimants – stop the legal profession offering ”no win no fee” cases as well -
Ridiculous sums of thousands being paid out to kids getting scratches in playgrounds. How many cuts and scratches did we get as children. Is it not a normal part of childhood !
We need a state owned insurance provider to cover all types of businesses and individuals needs in Ireland.
They don’t want to play the pyramid scheme game anymore
Bring it to the people and we will give you the power to tell the judges and the insurance industry what to do. Grow a set
The claim culture is parasitic on many industries in Ireland but it is a bad parasite that kills its host. The insurance companies have long complained about the high awards in this country but as long as they simply kept raising their premiums it was easy to paint them as the bad guys. If they refuse cover altogether the picture becomes a little clearer.
Everyone finds someone else to blame, but truth told the desire to put one over on the system damages everyone.
Mass cancellation of insurance!!!
Tits on a bull springs to mind when it comes to this government.
How are their hands tied? This can be sorted if a legal team puts forward a claim that is thrown out surely the law society should descend on that legal company and strike off the offending legal vultures. No so called profession should be allowed hold the country to ransom. If they can’t regulate themselves then subject them to independent regulation. Are this so called government for real?
There’s very little thye can do in regards to regulating the sector and ensure prosecutions for fraud etc, but when it comes to the government collecting taxes from theses organisations there’s plenty they can do.Ireland is one seriously backward country.
Stop voting for these clowns !
Those Insurance companies that continue to operate here in Ireland, on any cover from leisure to car insurance, will have us, all by the Balls unless this gutless government step in, which is highly unlikely
Censorship alive and well at the journal removing comments. Tut tut.
Party, family, parish, county, province, country.
I was looking at the TV the other night as Leo was opening a new stretch of motorway in Wexford. Beside him was Darcy and Keogh and it struck me that they must be the three most useless politicians we have on the books at the minute.
Fake and exaggerated claims and a rotten legal profession, allied to a lazy insurance industry whose sole answer to all challenges is to raise premia is a toxic mix. Collective political and legal skull cracking is needed to bring whole set up back to common sense reality
Ministers, if your hands are tied, then untie them by appropriates legislation for state run 3rd party insurance, for preset compensations for minor to serious injuries, including continuing care where required. No expensive lawyers or medics either, just hospital X-rays & treatment / care regimes.
Anyone wishing to opt for “premium” insurance cover can go buy a personal policy , just like a travel insurance.
That’s simple, no handcuffs either.
@William Kelly:
And by the way, don’t spew out the line about being unable to interfere in a free market.
If there is no market, you are free to provide the service.
@William Kelly: that’s very similar to the Australian model, works very well, starting premiums for younger drivers are only a couple of hundred $
Similarities between the banks and insurers ripping off the Irish consumers. Only a short time after being found to be profiteering.
https://extra.ie/2019/07/08/news/politics/sinn-feins-pearse-doherty-lays-into-insurance-companies-in-viral-video
Despicable bedfellows.
One more step towards being the world’s most boring kip!
What a cowardly useless government we have that can’t assert control over the insurance sector in the public interest. It is disgraceful that leisure businesses employing hundreds of people will have to cease operating because no public liability cover is available. If necessary and if no other solution is available they should be covered under the government’s own insurance operated by the State Claims Agency and the NTMA.
Blame the solicitors and judges who give ridiculous rewards. Yes alot of the so called “victims” are bluffing for a big payout but as long as these rewards keep getting handed out the more these claims will happen.
Government are full of mad dog shite
have your say