- Businessess involving children, adventurous or physical activity are effectively uninsurable
- The reduction in underwriters in the Irish market has restricted competition and encouraged collusion
- ISME questions how much worse does the insurance situation need to get before intervention?
The publication by the Central Bank of its First Report of the National Claims Information Database on Monday was followed by news on Tuesday that more than 1,000 creches could close with the withdrawal of one of the two remaining underwriters from the Irish market.
The fact is that certain businesses, particularly those involving children, or any form of adventurous or physical activity, have become effectively uninsurable.
Central Bank (CBI) data on insurer profitability (9%) was greeted with the expected crowing from the legal lobby, despite the fact that the CBI also said lawyers were charging fees averaging 63% on claims below €100,000.
Despite the phoney war between the lawyers and underwriters, there is an unhealthy symbiosis between the two of them in the Irish market. Neither could extort so much money from citizens without the other.
The departure of 250 insurance companies from the Irish market in the last five years belies the assertion that Ireland is a Klondike for insurance companies.
That reduction in underwriters has restricted competition, and encouraged market carve-up and possible collusion between underwriters.
What we have been left with after years of Government inaction is a survival-of-the-fattest, where only a few underwriters have the stomach to remain, and who charge us extortionately for the privilege of being quoted at all.
We now have the laughable situation where insurers are being castigated by our Justice Minister (and some members of the opposition) as the sole cause of the problem, while the hapless Minister of State D’Arcy travels to London and Brussels begging more underwriters to enter the Irish market. This is Laurel and Hardy material.
We must face the facts.
The Irish insurance market as a whole is roughly the size of that of greater Manchester, but with a risk-profile closer to that of Baghdad.
It’s populated by a rogues gallery of collusive underwriters, Saul Goodman lawyers, diagnosis-for-sale doctors, side-splittingly generous judges, torpid politicians, lawyer-journalists, and some tremendously accident-prone citizens, whose ability to sustain injuries on flat surfaces is surpassed only by their determination to defend their reputation in our thronged defamation courts.
Our creches are not just small local employers. They provide an essential service in society, without which many people, especially women, would be unable to work. Creches are one of the key areas ISME will target when we move forward with setting up captive insurers in 2020.
We in ISME are mystified as to how much worse the insurance situation must get before legislators intervene aggressively. It is absolutely inevitable that insurance will be a doorstep issue for general election 2020.
We express our gratitude to the Central Bank for their Private Motor Insurance Report, but we really need this data to be presented on an ongoing rather than an ad hoc basis.
That is the reason that ISME and the Alliance for Insurance Reform have been lobbying so actively following the demise of the Central Bank’s ‘Blue Book’ on insurance industry statistics.
Perhaps the Government will now commit to legislation requiring its publication.
The Washington Post’s motto is ‘Democracy dies in darkness.’ Unfortunately, so does affordable insurance.
- ISME should be referred to as the Irish SME Association
For further information, please contact ISME offices T: 01 6622755 E: firstname.lastname@example.org