Homecare f irms hit hardest as insurers increase premiums
BUSINESSES are seeing their insurance premiums increase by more than 120% in some cases despite recent reforms to limit personal injury awards.
Homecare businesses, nursing homes and hospitality are some of the sectors hit hardest by spiralling premiums.
The bleak outlook on rising insurance costs was detailed in a survey by the Alliance for Insurance Reform (AIR).
It has surveyed more than 450 businesses and voluntary and community groups on their premiums since this April, when new judicial guidelines were introduced to limit personal injury awards.
Almost half of personal injury awards have been under €10,000 so far in 2021 – mostly due to the new guidelines. Previously, just one in ten awards was under €10,000.
But AIR found that insurance renewal costs are still up 15% on average and called on the Government to increase competition and reform the sector faster.
Homecare businesses were worst hit by insurance costs with renewal prices up by more than 122%.
Nursing homes also faced insurance renewal increases of more than 35%.
Meanwhile, the hospitality sector was hit with a 9% increase in insurance renewal costs despite significant closures over the last 18 months due to pandemic restrictions.
Peter Boland, a director of AIR said insurers ‘cannot be relied upon to pass on savings’. He said: ‘The Government must act now to improve competition by getting additional underwriters into the market as a matter of extreme urgency.
‘They must ensure that insurers hold firm on the new judicial guidelines rather than settling at higher rates to clear claims.
‘Ultimately, they must ensure that all the savings being made are passed on to consumers so that Ireland gets affordable insurance right now and in the long term.’
In its research, AIR also found that almost half of charities, voluntary and community organisations saw increases of more than 10% in their liability insurance.
Tracy Sheridan, the owner of the Kidspace play centres and a director at AIR, said: ‘Everything is being done to facilitate affordable insurance. And yet we still see premiums increasing. Before the pandemic, premiums were already unsustainably high for so many sectors of Irish society.
‘Now, if the economy and society as a whole are going to recover from the pandemic, premiums must come down significantly for SMEs, voluntary and community groups, sports and cultural organisations and charities as a matter of urgency.’
Eoin McCambridge, managing director of McCambridge’s of Galway and a director of AIR, said that the ‘risk associated with every insurance premium has plummeted’ in the last 18 months.
He said: ‘PIAB [the Personal Injuries Assessment Board] has just announced a 40% reduction in average personal injury awards.
‘The Perjury Act has been commenced. The Garda Insurance Fraud Coordination Office has been opened.
‘Economic and social activity has been slashed for the last 19 months. And to further reduce risk, insurers are excluding Covid-19 from many policies on renewal.’
Insurance Ireland indicated last week that motor insurance premiums should continue to fall in light of plummeting personal injuries awards. However, the organisation also warned that public liability and employer’s liability insurance remained ‘challenging’.
‘All savings must be passed on’