Businesses call for action on cost of insurance

Fourteen business organisations, representing 25,000 companies across the State, have come together to press for action on the cost of insurance.

The Business Insurance Alliance says the cost of insurance has more than doubled in the last two years and is threatening the future viability of its member companies.

The Alliance has submitted a number of recommendations to the Government including the introduction of a single regulatory authority to oversee and monitor the sector. It described the present system with the Insurance Ombudsman as "unsatisfactory".

An independent regulator would help ensure that cartel-like activities are prohibited and that insurance companies are not purposely pricing themselves out of different areas of the market, it claimed.

The Alliance also want to see the immediate introduction of the Personal Injuries Assessment Board which it says would take the claims settlement procedures out of the legal system.

To combat fraudulent claims, the Alliance called for personal injury claims to be supported by a written affidavit. It also wants fraudulent claims to be subject to criminal proceedings.

The Alliance called for the introduction of legislation obliging insurance companies to notify businesses in advance of premium renewals and not to make settlements without recourse to the insured.

It also wants to see a government levy to be made available to companies experiencing financial difficulties as a result of higher insurance premiums.

ISME's chief executive, Mr Mark Fielding, said: "Insurance costs in Ireland are between three and six times those of our competitors."

Mr Fielding said the cost of insurance grew by an average of 48 per cent in 2001 and the trend is continuing this year with estimates ranging from 50 to 200 per cent.

He said: "If something is not done immediately to address the issue further job losses will continue and by year-end many companies who have traded successfully for many years will cease to exist."