THE MINISTER WITH responsibility for taking action on the cost of insurance has said he has sympathy for the businesses around the country faced with much higher premiums who can’t operate without insurance.

Speaking to TheJournal.ie, Minister of State Michael D’Arcy that while these businesses “don’t have to have insurance, it’s certainly not advisable [to operate without it]“. 

It comes after a week that saw another organisation say it is facing difficulty after being quoted tens of thousands of euro for insurance. 

In a statement on Monday, not-for-profit Galway Community Circus said it was the latest victim of “Ireland’s mounting insurance crisis [which] is resulting in organisation closures, affecting leisure and recreational facilities, sports activities and outdoor pursuits”. 

“Due to the national withdrawal of underwriters in Ireland, organisations are facing an impossible scenario of not getting quotes or cover for their practices,” it said.

In 2016, its insurance was €4,500, the organisation said. This jumped to €15,886.50 in 2017. Last year, it secured cover with a UK-based company. 

“This year, after months of endless hours of research and negotiation, we have been able to secure just one quote for insurance cover for our organisation for €23,890,” the circus said, adding it excludes any aerial acrobatics or any activity above 1.5m in the air. 

The situation facing Galway Community Circus is similar to that facing hundreds of other companies – businesses and charitable organisations – across the country in the leisure industry and those seeking public liability insurance.

In August, a leisure centre and swimming pool in Kildare said it was forced to shut down due to an insurance quote that was four times what it had been paying before that. 

In May, an outdoor adventure centre in Dublin was forced to remove some of its equipment after an insurance hike. Adventure centres in Meath faced closure over “ridiculous hikes”. 

Over the years, a number of insurers have left the Irish market. The recent departure of one of the last left standing when it came to the leisure industry – Leisure Insure – came as a blow.

Minister D’Arcy travelled to the UK recently with an aim of meeting insurers and underwriters to try to entice them back to the Irish market. 

“A lot of people criticise [Leisure Insure],” he said. “I actually don’t, because they were the last people to stay on the pitch.

They stayed in the longest and did their best to stay with their clients… My objective is to try to make sure that we have some of those awards down on the employer liability and public liability side of things.

In July, TheJournal.ie reported that the minister had sought a guarantee from insurers that insurance premiums would fall on the back of action taken by the government as a “gesture of goodwill” from the industry, but that guarantee was not forthcoming. 

In a statement in October, Insurance Ireland CEO Kevin Thompson said it had written to the minister to “outline the  public statements made by individual insurers that if the cost of claims was systematically addressed then consumers would benefit”.

Minister for Finance Paschal Donohoe also told the Dáil that “key figures” within industry had given a commitment in this area and that he and the government “intend to hold them to account in that respect”. 

Taking action

The government’s cost of insurance working group was created a number of years ago, and recommended a number of actions that would help to bring the cost of premiums down.

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Progress has been slow on a number of those recommendations made in a report in January 2017. In particular, the cost of awards made for personal injuries has not substantially come down since then.

The high awards for personal injury claims has been consistently highlighted by the insurance industry as a main driver behind the cost of premiums, although this has been heavily disputed. Payouts here for soft-tissue injuries, for example, are four times higher than the UK. 

One of the measures the government hopes will help to remedy this is the enactment Judicial Council Act, which will see the creation of a “personal injuries guidelines committee” made up of a Supreme Court judge, two High Court judges, and judges from the Court of Appeal, Circuit Court and District Court.

It is envisioned that the guidelines they set will help to bring down the payouts awarded for minor injuries which will eventually translate to lower premiums for customers.

Chief Justice of the Supreme Court Frank Clarke said this week that he is anxious to move forward “as quickly as possible” with this committee and a “lot of preparatory work” has been undertaken ahead of the judges coming together to compile their first report on new personal injury guidelines.

Minister D’Arcy has acknowledged in the past that there’s no “silver bullet” that will fix the problem of high premiums but told TheJournal.ie that getting the cost of awards down will be a good step in helping to attract insurers to the market and move premiums downwards.

And D’Arcy argued that the Judicial Council Act is one measure that could help achieve this.

“The issue there is that if you have one average claim, even that one years’ premium doesn’t cover that claim, or just about covers it,” he said. 

I’m pushing as hard I can. You know, I really feel sorry for those businesses who can’t operate without insurance. 

“Most of those insurance companies have said that if the awards come down, the premium will also come down… It’s the level of award doing the damage, more so than fraud.”