The “legal extortion” of crippling insurance premiums is threatening the existence of Ireland’s social fabric, including farmers’ marts, festivals and community celebrations, GAA clubs, and even children’s charities.
That was the bleak picture painted by a wide range of business and community leaders at the Oireachtas finance committee, who implored lawmakers to step up and resolve the crisis.
The committee heard:
- Marts around the country face closure in the next year because of “drastic” spikes in insurance costs;
- The GAA has seen its insurance bill double in the past five years;
- 75 festivals around the country have been scrapped in the past two years because of rising premiums;
- A children’s charity saw an almost 100% increase in insurance costs this year, meaning 17% of its grant allocation was eaten up;
- Motorsport in Ireland is surviving “week to week”, having seen a 188% increase in insurance costs this year, with rallies such as Galway International cancelled.
Peter Boland of the Alliance for Insurance Reform (AIR), which represents business and community organisations, said:
“There is a great deal of fear out there among many organisations afraid to go public on their experiences because they are at the mercy of one underwriter only or because they are afraid to draw additional claims on themselves. So what you are hearing is only the tip of the iceberg.”
Mr Boland said it had to be a “turning point” for exorbitant premiums.
“The current system is dysfunctional to the extent that what is supposed to be a service industry that facilitates the operation of society has become an extractive industry, taking over €2bn in motor and liability premiums annually,” he said.
“Yet our members feel that it is the insurance industry and the legal profession that have the strongest voices in the corridors of power. Policyholders feel that we have no voice.”
Director general of the GAA, Tom Ryan, said insurance bills were now the biggest for every club in the country.
Eimear McGuinness, manager of Donegal Co-operative Livestock Mart, said marts across the country were facing closure in the nest year because of rising costs.
Insurers were too quick to pay out claims instead of challenging them in court. She cited a case of a man with an injured toe who settled for €13,000, even though he had no broken bones.
“FBD is paying because it is cheaper than court. We are at their mercy because we cannot get a quote from anyone else,” she said.
Ivan Cooper of The Wheel, which advocates for charities, said insurance costs were a “crisis for communities”, with organisations seeing premiums rise 10 times in the past three years.
He said there was evidence of one children’s charity that saw premiums go from €9,000 to €16,000 this year.
The “outrageous” increase was tantamount to “legalised extortion” and 17% of that children’s charity’s total grant allocation was going on insurance costs, he said.
A disability transport charity was paying more for insurance than it was for petrol, he said.
Some 75 festivals have “collapsed” in the past 36 months, the executive director of the Association of Irish Festivals and Events said.
Colm Croffy said it was now a “crisis point” in Irish community life, with insurance costs affecting the enthusiasm of volunteers who fundraised, collected and administrated for the benefit of the community, only for 40% of it to go to insurance companies.
FBD chief claims officer Jackie McMahon said high premiums were caused by “gaming” of the injury process, high legal costs, and delays in the system. Some legal practitioners were “turning on the money machine” and rejecting offers in the hope of bigger payouts for claimants, he said.
“In the legal system, delays are everywhere. There is profit in procrastination.”