Alliance presents strategy to tackle 'insurance crisis'

Fourteen business associations, representing 25,000 firms, employing more than 400,000 people, have joined forces to tackle rising insurance costs, which they say are causing job losses and company closures.

The alliance, which has already put recommendations to the junior enterprise minister, Mr Noel Treacy, will present tomorrow its strategy for tackling "once and for all the continuing insurance crisis", according to member and Irish Road Haulage Association communications director Mr Gerry McMahon. The associations have come together in response to "the sustained threat of increasing insurance premiums to the future viability of member companies in each association".

Mr Treacy accepted there were similarities between the issues behind the problems businesses were facing with insurance and those in the motor insurance market set out in the Motor Insurance Advisory Board report last week, Mr McMahon said.

The alliance has met the chairman of the committee charged with the implementation of the MIAB's recommendations to stress their common ground. It wants to ensure that any recommendations implemented apply to the business as well as the motor insurance market, he said.

The alliance has told Mr Treacy that it wants:

the appointment of a well- resourced independent single regulator to oversee and monitor the sector and to investigate the insurance industry so that cartel-like activities are prohibited and insurers cannot use price to pull out of selected areas of the market;

the immediate establishment of a Personal Injuries Assessment Board to take claims settlement procedures out of the expensive legal system;

the introduction of a Book of Quantum (setting outline award levels for specific injuries) to reduce uncertainty and reduce legal costs;

an affidavit of claims systems to reduce the incidence of fraudulent claims, with criminal proceedings taken against individuals involved in proven fraudulent claims;

legislation requiring insurers to notify businesses 10 weeks in advance of premium renewals and prohibiting them from making settlements without recourse to and approval by the insured.

the production by the Irish Insurance Federation of a Matrix of Costs giving indicative insurance premiums for industry sectors and firms by numbers employed and turnover so that companies can benchmark their renewal quotes against similar-type companies and international standards;

companies in economic difficulties due to rising insurance costs and the collapse of the Independent Insurance Company should be given assistance from the Government levy.

The alliance includes the Consumers Association of Ireland, the Irish Small and Medium Enterprise Association, the Chartered Institute of Transport, the Irish Hotels Federation, the Restaurant Association of Ireland, the Licensed Vintners Association, retailers' group RGDATA, the Irish Exporters Association, the Irish International Freight Association, the Irish Road Haulage Association and the Society of the Irish Motor Industry.

ISME chief executive Mr Mark Fielding said rising insurance premiums were now the biggest cost issue for Irish firms. On behalf of the alliance, he said the cost of insurance for business had risen by an average of 48 per cent in 2001 and this year increases of 50 to 200 per cent were estimated.

In its pre-election statement, employers' body IBEC, to which several of the groups belong, called for effective steps to reduce insurances costs. "Insurance is now the second most expensive item in running a business after payroll costs," said IBEC's director of enterprise, Mr Brendan Butler.