Calls for government action on insurance reform as premiums continue to rise

‘The Government’s insurance reforms still haven’t delivered for business,’ one store owner said.

Fine Gael TD Jennifer Carroll MacNeill with Leo Varadkar in Dun Laoghaire
Jennifer Carroll MacNeill Fine Gael TD Jennifer Carroll MacNeill with Leo Varadkar in Dun Laoghaire (Michelle Devane/PA)

There have been calls for further government action on insurance reform after a report found premiums are on the rise.

It comes as Fine Gael leader Simon Harris pledged to prioritise helping small businesses with mounting costs ahead of his nomination as the next taoiseach on Tuesday.

The Central Bank published its National Claims Information Database (NCID) Liability Report for 2022 on Thursday, which covering the public, employer and commercial liability sector.

It indicates that insurance premiums for liability cover increased by 8% in 2022, despite the total cost of settlements falling by 14%, or 43 million euro, on 2019 settlements.

Flora Crowe, grocery store owner and board member of Alliance for Insurance Reform, which represents 46 civic and business groups across Ireland, said the cost of doing business is “already too high”.

“This report proves what we already know, despite all the reforms the Government introduced, and despite the decrease in the volume and cost of claims, our insurance premiums continue to rise.

“The Government’s insurance reforms still haven’t delivered for business.”

Simon Harris said he will focus on small businesses when he becomes taoiseach
Simon Harris Simon Harris said he will focus on small businesses when he becomes taoiseach (Grainne Ni Aodha/PA)

The government’s Action Plan for Insurance Reform, published in December 2020, sets out 66 actions for reform to bring down the costs for consumers and business and to introduce more competition into the market.

The fourth progress report, published in February, shows that approximately 95% of the 66 actions are being delivered on, including the strengthening of the Injuries Resolution Board and rebalancing the duty of care.

Minister of State for Financial Services, Credit Unions and Insurance, Jennifer Carroll MacNeill, said the Central Bank report does not capture the duty of care reforms introduced in July 2023.

“Businesses now know with confidence that the issue of ‘slips, trips and falls’ has been legislated for and the market has become more fairly balanced for all.”

She added: “I note the annual change in business insurance for 2022 mirrored the 7.8% inflation rate at that time.

“As the rate of inflation has since eased, it is my expectation that we will see the same happen in relation to business insurance premiums.

“I will continue to raise these two issues with the insurance industry on behalf of businesses when I meet them and expect that we will see the impact of the reforms, as well as the softer inflationary environment feature in future iterations of the NCID reports.”

Ms Crowe continued: “The NCID report highlights how some sectors have been hit particularly hard by rising premiums.

“In the three years between 2020 and 2022, the percentage change in average premium for the accommodation and food sector increased by 24%, for transportation and storage by 16% and in human health and social work activities by 22%.

“Arts, entertainment and recreation sector premiums rose by 8% in these three years but this comes on the back of a 111% increase in the six years prior.”

“These sectors are the lifeblood of our communities.

“In the absence of meaningful competition and further Government action, insurers have shown they won’t voluntarily reduce premiums, despite a 41% reduction in the volume of claims since 2019 (PIAB, Annual Report 2022) and various other reforms such as the Judicial Guidelines.”

Mr Harris said on Wednesday after meeting with his party’s Small Business and Enterprise Council that small businesses and the costs they are facing is an area he plans to focus on while in office.