Sir, - I write to express my concern at the continuing high cost of liability insurance for employers in Ireland. Despite enormous amounts of preparatory work by the previous Government the present Minister, Mr. Pat Rabbite, has neither introduced any legislative proposals to cut the high cost, nor indicated his intention to take alternative action on the issue.
Some months after his entry into office, the Minister told the Dail that he would commission a study into the high cost of insurance. To date, neither the public who face high motor insurance costs, or employers who face equally high costs to their businesses, have heard any indication of his intentions.
Following many reports and studies into the problem, one factor is clearly emerging as a cause of concern. That factor is the alarming rise in the number of claims, as well as the relative ease with which awards are settled. In an environment where claims coupled with high levels of compensation are on the increase, so too are the levels of premium charged by insurance companies.
Some time ago, IBEC carried out a survey involving over 300 companies involved in many trades and forms of business. "Their results indicated that over a period of four years, 65 per cent of the companies surveyed had an employer liability claim against them. Another discovery was that there was an average of 10 claims per company surveyed. Settlement figures for these ranged from £13,000 to £21,000, depending on whether the claim was settled in or out of court.
This type of claims environment is seriously damaging the financial position of many small and medium sized enterprises and seriously erodes their competitive position vis a vis our UK and EU trading partners. A continuing lack of resolve by Mr Rabbite in relation to this problem will, I believe, result in pressure on companies to sustain or increase their current levels of employment.
The Minister should immediately introduce the necessary legislative proposals contained in the insurance cost reduction bill which allows for him to set limits on awards of compensation for pain and suffering. This would have the dual effect of reducing the cost of claims and premium to both insurance companies and employers. - Yours, etc.,
Sandyford,
Dublin 16.