Rising costs of commercial insurance must be curtailed

Yesterday Cork based Fine Gael Senator, Tim Lombard, debated in Seanad Éireann about the need to curtail the increasingly high costs of insurance as to ensure that insurance premiums are affordable for the agriculture and business sectors.

“Recent years have seen successive increases in the price of insurance premiums across the board. Many in the business and agriculture sectors are paying increasingly exorbitant premiums which are becoming completely unaffordable.

“One business owner in West Cork has had an insurance increase of more than 100% between 2014 and 2016. This is a worrying trend; where the increase in cost is higher than the total insurance cost of two years prior.

“And these soaring prices aren’t a once-off. Successive years have seen significant increases in insurance premiums, and business owners are rightfully concerned about the unsustainability of this necessary and increasingly unaffordable investment.

“Yesterday I called on the Minister for Finance to initiate a review of insurance costs within the business and agriculture sectors. The Minister of State, Michael D’Arcy TD, said a Cost of Insurance Working Group has been established to review the extent of the issues within the sector, the first phase of which focused on motor insurance. Throughout this process the Working Group decided to initiate a second phase to examine the cost of public and employer liability insurance as these are the second and third largest areas where personal injury claims arise.

“As public and employer liability insurance are the two core insurance types necessary for the agriculture and business sectors it is important to review and try reduce these costs as to minimise insurance premiums for these sectors.

“While the Government cannot directly interfere and enforce pricing thresholds on insurance providers, it is possible to influence factors that contribute to market stability as well as the availability and cost of insurance.

“One of the biggest factors currently affecting insurance costs to the consumer is the competition, or lack thereof, within the insurance market. There are only two major insurance providers for Ireland’s agriculture and business sectors, effectively reducing the need for competitive, or, in the eyes of the consumer, affordable, premium rates.

“In order for insurance premiums to be sustainably reduced there needs to be more competition within Ireland’s insurance sector. To address this issue the Government must make the market more attractive to potential insurance competitors.

“I hope that a wider review into the insurance industry could highlight the current issues facing insurance consumers in the business and agriculture sectors, and recommend other constructive initiatives for addressing the issue of escalating premiums.”