Pubs, restaurants and hotels are finding it easier to source insurance and at cheaper rates as Government action on the sector takes effect, an industry specialist has said.
CFM Group, a broker specialising in the hospitality sector, says Government action is finally delivering increased competition in the sector and better insurance deals for businesses. It says there has been much more activity in the sector this year, with insurers competing for the business of hotels, pubs and restaurants.
It is a trend CFM says it expects to continue.
Managing director Jonathan Hehir attributes the improved environment to the new Government personal injury guidelines and a reduction in spurious claims.
“For the first time in a while there’s good news for the people behind Ireland’s hospitality sector,” he said. “Twelve months ago, a pub owner might only have been able to get one or two quotes – neither of which would have been considered competitive. Now many can expect to be able to choose between three or four – and sometimes as many as six″.
He said that reductions of 20-30 per cent in the cost of premiums on policy renewals were “no longer unusual”. And even businesses that had previously had to claim on their policy were no longer being treated as “insurance pariahs”.
“Just last month we had a client whose pub insurance policy was up for renewal. The incumbent insurer offered to renew at €9,000, but another insurer that wasn’t overly active in the hospitality market this time last year quoted €6,800,” he said.
“Another pub we worked on behalf of had been subject to a claim two years ago and was now facing a renewal quote of €15,000. We managed to secure it at €11,000 with an alternative provider”.
Mr Hehir said that a dearth of competition and a lack of legislative controls around personal injury claim costs in recent years had resulted in an insurance nightmare for many in the hospitality sector. The recent developments could see a change in the fortune for a sector that employs more than 200,000 people across the State, he said.
The positive developments on the insurance side of the business have emerged as it comes to terms with the ending of favourable VAT treatment. A specially discounted 9 per cent rate of VAT on the hospitality sector was not extended at the end of last month, after a summer when a spotlight fell particularly on hotel room rates.
Businesses in the sector have also been struggling with rising costs for energy and general supplies, as well as a shortage of labour that is putting pressure on rates of pay.