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THE MINISTER OF State with responsibility for bringing down the cost of insurance travelled to the UK this week to try to convince insurers to operate to the Irish market, in the wake of the departure of one company which has caused grave concerns for the leisure industry.
Minister Michael D’Arcy was due to meet with a number of UK insurers and underwriters in London this week.
The purpose of these meetings was to “advise them of the most recent legislative changes and promote Ireland as a place to continue to write business,” Minister for Finance Paschal Donohoe told the Dáil in response to a parliamentary question.
Donohoe added: “I think it is an important exercise as hopefully it will encourage some insurers to rethink their position about the Irish market.”
‘Compo culture’
The insurance industry has repeatedly said that the high level of personal injury awards and the number of fraudulent cases has driven up the cost of premiums in Ireland.
The government set up the Cost of Insurance Working Group in July 2016 to try to develop proposals that would bring down the price for consumers.
A number of developments that have been made include the establishment of a personal injuries commission to help to benchmark awards. It found that the payout for soft tissue injuries in Ireland is over four times more than the payouts in England and Wales.
And, although the cost of insurance is going down according to CSO stats, concerns have been raised that the industry could be knowingly misrepresenting the full picture in these statistics.
In a meeting in June, Minister D’Arcy asked representatives from Insurance Ireland for a guarantee that premiums would be lowered to reflect the action being taken to reduce the level of awards for personal injury claims.
Insurance Ireland replied it would be “difficult to persuade insurers to expand their risk appetite”.
A recent investigation by Noteworthy found that insurers’ spending on liability and motor claims has barely changed in a decade despite suggestions that Ireland’s rampant ‘compensation culture’ has been behind the country’s recent insurance crisis.
The leisure industry is one sector hit hard recently, after provider Leisure Insure announced that it was withdrawing from the Irish market.
The decision 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.
The government said that its hands were tied with limited options to offer relief to such companies affected.
One leisure centre and swimming pool in Kildare recently said it was shutting down after failing to secure cover, with the only potential quote more than four times what it had been paying before that.
Spin Activity Centre said there had not been a claim against it in the three years since it had opened.
Failure to secure insurance also hit the Dublin Oktoberfest festival which was cancelled this year with organisers citing high insurance cost.
Steps forward
Another action the government has taken has been the enactment of the Judicial Council Bill 2019. This provides for the establishment of a Personal Injuries Guidelines Committee.
While this hasn’t been put in place yet, Minister Donohoe said it should be before the end of the year.
Commenting on the withdrawal of Leisure Insure from the Irish market, Donohoe said that Minister D’Arcy had met with the company and was told “certain parts of the company’s leisure book were not profitable over the last number of years”.
“I acknowledge that the level of awards and the inconsistency in such awards is undoubtedly a factor in many insurers’ decisions not to continue in the Irish market,” Donohoe said.
He said that, in light of this, the “single most essential challenge” was to bring the level of personal injury damages down.
Commenting on D’Arcy’s trip to speak to insurers in London, Donohoe said he hoped Irish-based companies would also be mindful of recent changes.
I believe that Irish based insurers should also reflect on these reforms and in that context Minister of State D’Arcy has been engaging with them in order to seek a commitment that they will reduce premiums and widen their risk appetite to reflect savings made or potential savings, in particular if there is a recalibration of award levels downwards.
Donohoe concluded that he was confident that over time the pressure on businesses when it comes to the cost of insurance “should recede”.
TheJournal.ie has contacted the Department of Finance for comment on this week’s talks.
With reporting from Peter Bodkin
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Bullshit, all of it. Spin spin spin…
We’re nowhere near the end of the bailout until it’s all paid off, so 40+ years..
If it was a mortgage cheque issued to you, then you have received the money/ keys and moved in, you can now chose the wall paper, furniture etc.. Try falling behind on payments and see what happens.
We are now firmly enslaved to Europe.
Biggest con job, ever!
Spot on.
A country? Owing money? Who’d have thought???!!!!! You’d think they’d have a name for it? You know. Like “Sovereign Debt” or something. But I suppose if it had a name, every country would be up to their proverbials in it. Oh wait. They are. Grow up, would you? Thanks for pointing out we’ve been saddled with a shed load of debt. We’d never have known that if it wasn’t for you. The announcements are nothing to do with the debt. Every country has that. The announcements relate to the period of exceptional, onerous conditions and loss of economic sovereignty that went with the debt. Which has now come to an end in Ireland. The only spin going in here is you attempting to paint everything black with your “the end is nigh” narrative. Not only is it wrong, but it’s pretty boring too.
Correct shayno !!! Robbed by the very power we elect to help and look after us
Kevin what is this loss of economic sovereignty that has come to an end that you talk about. We are still under the control of the EU. We have budget targets set out by EU that we must not break, if we do we will be fined, we have to pay large amounts of money into other countries to help prop them up and we are forced to do this as part of the ESM fund. Our economic sovereignty has long been given away, and we will never see it again, something that was fought so strongly for at the loss many live’s, was given way overnight while we slept with no opposition from the people.
True it will be paid off years and years away in the future. Regardless of IMF/EU Bailout (or loan), we would still have to borrow money, like everybody does. Only difference is that under the “bailout” we got it a lot cheaper than would have on the markets.
Comparing a person with a mortgage is not comparable to a country. People die which is why they need to pay back what they borrowed before they die (ie a mortgage or loan or whatever).
A country is a different story, a country does not die like a person does. And barring fluctuations in the economy over time a country GDP steadily grows. In theory indefinitely. Hence borrowed money can be refinanced and after interest etc still less of a percentage of debt to GDP.
Kevin the FG troll back on I see.
Kevin, you are wrong on so much that I would be on here all day pointing it all out to you, but you know already I suspect as you couldn’t be that stupid, surely..
You lose once you decide to attack a person for their comment, (their right even if it doesn’t fit Fg agenda).
As you have opened that door, you do remind me of a previous absent friend (Vincent D), a tool of monumental proportions.
Dead right Kevin, some people here do not seem to understand sovereign debt, as illustrated by their comparisons of a countries debt to a persons mortgage, a sure sign of economic illiteracy. All too common on this website.
Joe,
I was assuming that you would read between the lines as I was not comparing the bailout (long term loan with interset) with mortgage (long term loan with interest). Although at glance are similar.
My point was the real level of choices that we have to improve/invest/progress as a country whilst we are committed to paying down the phenomenal interest of 8/9 billion per annum.
As in most peoples lives they will tell you they only really start living when they clear their mortgage, until then they are a slave to it too a degree..
That was my point as we have a long way to go, and yes there will always be sovereign debt, but not usually paying for 42% of the total bill for Europe, especially as we only account for 2/3 % of its population..
I’m really sorry you didn’t get it.
and there is no growth or inflation to ease the debt. If we had 2% growth and 2% inflation in Europe old debt in real terms would become 4% less onerous each year as we developed above it.
Instead we have a continent with 0.5% growth and heading towards deflation.
The Euro. Weedkiller for economic growth.
Shayno- it’s not that Joe didn’t get your point. It’s that it was weak and poorly articulated. No surprise there.
Shayno- By the way- every time you whine about the debt we face like a petulant little child kicking and screaming on the floor of the frozen food aisle in the local Tesco , I get a little warm glow of contentment as I reflect on the massive mess FF left behind and the decent job FG are doing to fix it. You’re welcome by the way.
Kevin, he clearly didn’t get it as he thought that I was comparing the mechanics of the two..
Seeing the big picture is clearly not one of your strengths..
6 hrs for you to cobble together that “articulate” response.
I’m also glad you are grammar perfect or one would think your views are that of someone who is permanently drunk or high, but they’re yours and I respect that.
Size of Spain….€41 billion bail out….size of Ireland €85 billion bailout! Fcukin hell, we are so screwed!
Spain’s bailout should have been about 300bn. Their growth is non-existent, their property bubble is still artificially inflated. Their population is in long term decline.
No doubt Lenihan and Cowen and the FF boys slit Ireland’s throat with their crash and the terms of bailout that will keep us working to stand still for decades to come, and it will be decade to come and yet we’re still one of the strong performers in Europe, FRIGHTENING.
Spain is utterly butterly fuc8ed in the now and its banks haven’t even admitted the debts hey have.
Alright Portugal – Woo Hoo – now lets go shopping!
Love this comment “tremendous efforts by its people” more like after shafting the people of Portugal….
So what would be your alternative proposal to the funding shortfall they faced then Kerry? Given that they were unable to finance themselves from the international markets. Not get a bailout and make spending cuts overnight to balance the budget?
Let’s face it, you never offer anything except short populist soundbites. No alternatives. No solutions. Nothing.
Exactly Ryan. People here are always complaining but never put forward any alternatives.
Irish shortfall bondholders should have never being paid back that cost us 17 to 18 billion euro per annum that would have made up our “short fall” currently stop diverting 20% of all Irish revenue to paying out these “loans” from Europe. Loans generated to protect the banks in Europe. Let Europe pay it. I suspect if Portugal looked under the hood of their deal they would also see funds flowing out rather then being invested in their country. Quite simple really no need to pay special advisor’s over the salary limit to work things out.
Greatest load of Crap with the other Dip Stick on his left.
Spin… spin…
Enda “We are reaching the end of the bailout”
Dear Enda – please finish the rest of that sentence… “We are reaching the end of the bailout and we (well YOU are) paying it back for the next 40+ years – as will your children and your grandchildren!”
I love how Enda and co ALWAYS forget to mention the rest of the details! Nice eh?
What’s your alternative? Let me guess… “Burn the bondholders”
Most of the people on this website who put forward that particular solution don’t even know what it means.
Portugal is hitting 129% debt to GDP. There is no growth in Europe and the debt will, even with the best of intentions rise further next year, as there is no growth.
Portugal may have reformed its economy but the EU pretended there was no debt problem and it has not gone away.
Over 5 years the EU has refused to face up to the reality of continent wide debt. It will not at this stage.
A good start would have been not to pay the gamblers we were/are not legally obligated to pay?
That would have been normal business practice and the IMF wanted us to do that bu the EU/ECB stepped in to prevent that.
Why can’t people ever be happy about “good news” ? Why can’t people stop shooting holes in good news stories ? Fact is regardless of whether you agree with the bail outs or not ,they served their purpose. The Euro zone is recovering,Ireland is recovering,things are looking better all round. Yes it was hard,yes it still is for many,many families. But how bad would it have been without the bail out monies ? Where would we have got the money to sustain all the people on social welfare ? The state would have collapsed into anarchy. So many mistakes were made,so many lessons learned,yet we are now on the road to recovery . I just wish people would look forward,not back. We didn’t end up with a “Hooverville” in the Phoenix Park like the US in the great depression,why ? Because we got help and foreign aid in the form of bailouts . Lets just move forward,chest out head held high. Never forget these dark days,learn from them,never repeat them and all work together to make this Nation great again. Too many knockers ,nay sayers and begrudgers looking for us to fall on our arse again. Positive news should be met with a positive reaction,not snipers hiding in the ditch .
Good news? Are you for real?
Are you conveniently forgetting bout the part that we are now paying for the bailout for the next 40+ years and even then at the end we have to come up with the principle amount – having just paid off the interest?
Little known fact: Before the bailout, Ireland also had billions of euro of debt to repay over the coming decades arising from previous budget deficits.
@J.Rudd – we will be paying interest on the debt for the next 40 years and then the debt will be rolled over. In 40 years it wont be a significant sum of money due to inflation, so the amount shouldn’t be a problem too us. In the 1980′s Ireland struggled under a debt of that would now be less then 35 Billion euro. If our debt was 35 Billion now, we’d be laughing.
The Euro zone crisis is not over yet. The positions of all countries continue to decline, debt to GDP in Portugal is a whopping 129% and growth is fragile and anemic. Look at Italy, a country that is starting to drown in debt even though it has had a strong economy for the last 10 years and runs a primary surplus.
The EU approach to this has never worked any where and has included a strong commitment to look away from problems.
The problems have not been addressed never mind solved.
Rolling over and extending the debt is the only way that we can get out of this. Many countries never even bother paying off the principal, not for along time anyway. Britain and France paid debt in the last 10 years off that were over a hundred years old.
State debt is nothing like Mortgage debt.
@ JD: “In 40 years it wont be a significant sum of money due to inflation, so the amount shouldn’t be a problem too us. In the 1980’s Ireland struggled under a debt of that would now be less then 35 Billion euro.”
John, the big difference between now and the 80s is we are locked into a currency whos central banks remit is to keep inflation below 2%. Noonan made the same false comparison with his ‘when I bought my house’ BS analogy. If he genuinely believes his own words he is too numerically challenged for his old school teacher job, never mind minister of finance.
The longer the debt is extended or pushed out the better for us, and to be honest the Govt. have had some success in doing that.
With inflation at 2% and growth at 2% then the debt would be decreasing by 4% every year in real terms and would half in 18 years. So he is right that it will decrease with time in a normal currency.
The problem is that the Euro is not a normal currency, there is no stimulus for countries caught in self reinforcing slumps and there is go inflation.
The ECB will have to force inflation up to 2% or the debt burden actually grows, as it is now doing in real terms in most of Europe.
Growth and inflation solve debt crises,austerity is only a 1/3 of the solution that has been made the whole.
Tell me how the country would have survived without the bailouts ? Yes its good news,countries are recovering,but its people like u who would rather wallow in bad news and see us go tits up again just so you could say “I told you so”. You tell me how this country would have sustained over 20% of its population out of work without the bailouts ? I don’t argue we got ourselves into shit as a country,so many people in power abused that right and privilege and sent us up shit creek without a paddle. Yet we are as a nation coming out the far side,so many said we wouldn’t,so many said as a nation we were dead and buried. Well the countries heart is beating again,people are finding jobs,less people on the dole,more people than ever getting re educated at third level. So yes its a good news story,keep wallowing,keep sniping and begrudging,but where will it get ya ? You can live in the past or change your future. Ask the German people about life after Hitler and how they have became a great nation again,by self pity and wallowing ? No,by hard work,national pride and determination that they would never allow that to happen to them again. So you keep knocking good and positive news,but where will it get ya ? You cannot change your past,yes learn from your mistakes ,but you can change your future and that’s what I as an proud Irishman would rather do than take the moral high ground and wallow in the past.
“Tell me how the country would have survived without the bailouts ?”
We were not bailed out, thats your first error.
Even the OECD thinks that the EU approach has failed.
I think that Rehn and Barroso etc know that their policies are destructive but have no idea what to do with a Germany that refuses to look at the wider picture and when the solutions mean admitting that the Euro was a mistake.
Everybody wants to knock the bailouts,yet not one person has offered an alternative to them ? Of course we’d be better off if we never needed them,Of course we never should have been put in that position to ever need them. Fact is we as a majority in this country were left by a minority in the place we are. Now we’ve got to get over it,never forget it and move on. You cannot live in the past,nor forget it,history teaches us that. So can any of the knockers of this good news,any of the red thumb brigade tell me how we would have survived without the bailouts ? Or will they all just continue to wallow in the past and hope we go backwards so as to inflate their egos and they can say “told you so”.
@ Stephen , just think, if we were not to complain whats the chances it would happen again
@ J Rudd ,Im awaiting your answer on how we would have survived as a nation without the bailouts ? Not why or how or who got us in a position as to why we needed them,but how we would have survived as a nation without the bailouts ? I await your reply with bathed breath . Or will you just continue to wallow,snipe and begrudge ?
“Not why or how or who got us in a position as to why we needed them,but how we would have survived as a nation without the bailouts ?”
How convenient. Ignore the cause and effect which necessitated the bailouts in the first place.
Reminds me of that episode of question time where George Galloway, who was opposing British intervention in Libya, was asked what then should Britain do about Gadaffi using tanks to kill his own citizens
Galloway responded “Well I wouldn’t have given him the bloody tanks in the first place”
Remember our government refused to tell us who were the bond holders that were paid the billions in gambling debts,Why ?
have your say