Deputy Cassidy wants to rein in insurance costs

Insurance has become unsustainable for Irish people and their businesses, argues Donie Cassidy, TD, who believes costs can be cut by 30% in the next year. Barry O'Halloran reports

Deputy Donie Cassidy is a man with a mission. He believes that the spiralling costs of insurance can be cut by 30 per cent over the next year. "We want to get costs back to where they were three or four years ago," he says.

It's a tall order, because the cost of insurance cover has multiplied by anything up to three times over the last three or four years. When he took to the hustings in the spring of 2002, one issue that voters raised with him time and again was the high cost of insurance. Businesses in his Westmeath political base told him the costs were seriously debilitating.

One company that was paying €400,000 for cover in 2000 was this year quoted €1.3 million. Another has seen its bill jump from €100,00 to €452,000 in the same timescale.

Even more seriously, he says that one of the leading small roofing contractors in the midlands area packed up and emigrated to Australia because insurance costs made it impossible for him to do business here.

Insurance costs are the most common explanation given by companies that have let workers go over the last year. This week, they topped the list of reasons given by Carlow company, Lapple Ireland, for seeking 35 redundancies.

The Taoiseach, Mr Ahern, made Mr Cassidy chairman of the Oireachtas committee on enterprise and small business after he was elected to the Dáil last year. Soon afterwards, the Government asked the committee to carry out a wide-ranging investigation into the high cost of insurance cover.

"The Government became anxious to address this issue," he says. "It's unsustainable, the premiums that insurance companies are demanding at the present time. We have a very serious job on our hands."

It certainly sounds like it. Over the last seven months, Mr Cassidy and his committee members took submissions from 47 organisations and individuals. Between June 19th and July 23rd, the committee quizzed more than 20 individuals and organisations at a series of public hearings in Leinster House.

Those who turned up included four of the leading insurers in the State, and the ministers for Justice, Transport, and Enterprise Trade and Employment. The committee cross-examined representatives of both legal professions, and most of the leading business organisations in the State.

What it found was that fewer insurance companies were prepared to underwrite a growing demand for policies. The small number of companies doing business here is the result of EU-wide consolidation and, insurers claim, of the fact that they cannot make a profit on premium income in the Republic, because of the number and size of claims. They blame a sometimes chaotic and unpredictable legal system for this.

Mr Cassidy is unwilling to blame any one group or set of individuals. Instead he says he is more concerned with finding a solution. "If there is anyone who can help us with that, we will be calling for their help," he says.

At least part of that solution will include measures designed to control the cost of claims. If these work, then he argues that the Irish market will become more attractive to new entrants, with a subsequent increase in competition and hopefully better value for consumers.

The committee has asked Competition Authority chairman, Mr John Fingleton, to complete its investigation of the insurance industry before the end of the year and to publish its findings. Mr Fingleton has agreed to do this.

The call to the Competition Authority is included in a list of 40 recommendations contained in the committee's interim report, which it published last week. Mr Cassidy naturally wants to see action on all fronts, but some will take longer than others.

"The number one priority as far as we're concerned is the number of uninsured vehicles on the road. It's costing everyone's premium an estimated 10 per cent at the present time," he says.

"Last year, €90 million was paid out [by the Motor Insurance Bureau] in insurance awards for these uninsured vehicles on the road. Straight away everyone will get a 10 per cent drop in their premiums if that can be addressed."

He says this can be addressed almost immediately if the Government is willing to amend the existing legislation and regulations governing motor insurance. The committee and its chairman also want the autumn session in the Oireachtas to focus on the legislation needed to reform the insurance market.

Some of that legislation is already due to go through in the autumn. The Tánaiste, Ms Harney, has already pledged that the legislation needed to establish the new personal injuries assessment board (PIAB) will be passed in this session. The board is due to begin dealing with claims in the new year.

The Civil Liability and Courts Bill, which imposes a 10-year maximum sentence for perjury and outlaws making false or exaggerated claims, will also be published during the autumn.

Mr Cassidy believes that these measures will make a big difference to the cost of insurance over the next year. He also wants to see a substantial share of the recent gains made by Hibernian and other motor insurers passed back to their customers. But he is careful to stress that he welcomes the fact that Hibernian recently reiterated its commitment to give reductions to all penalty point-free drivers from November.

Despite a basically conciliatory approach to the problem, he believes both the insurance companies and the legal professions will have to take some of the economic pain. "Whether or not things are going well, they get paid anyway," he says. "What we are interested in is the private sector, the job creators; they have played a major role in getting Ireland where it is today, and we won't let them down now in their hour of need."

Mr Cassidy is no stranger to the difficulties of running a business. He is a full-time politician, but he chairs the Cassidy Group, which owns Cassidy's Hotel and the Belvedere Hotel in Dublin.

It owns four record stores, including Celtic Note on Nassau Street in Dublin. The group also includes CMR Records, which, he says, is the second-biggest Irish label. The group also has what he calls a substantial property portfolio. His four sons run the businesses.

Public records show that Deputy Cassidy is currently a director of 12 companies, along with his sons and wife. Companies office returns show they are generally finacially healthy. Cassidys Hotel Ltd's balance sheet shows it had IR£183,099 in total assets at March 31st, 2001. The record label, CMR had total assets of €856,600 at end March 2002, while Celtic Note had €27,328 in total assets on the same date.

Mr Cassidy has a long association with the music business. He was one of the biggest promoters in the country in the 1970s and 1980s.

He also hosted a radio show during that period, which specialised in Irish and country and western music.

He does not drink or smoke and is a keen GAA fan, and of hurling in particular. Cassidy's Hotel sponsors the Westmeath senior hurling final every year, and the hotel itself draws big crowds on weekends when there are championship matches in Croke Park.

His only vice appears to be golf. He is a life member of Mullingar Golf Club, and is a trustee of Delvin Castle Golf Club, along with his wife Anne.

He was first elected to Seanad Éireann in 1982, and was leader of the house between 1997 and 2002. This is his first stint as a TD, and it looks like the insurance issue is set to dominate the rest of his current term in Leinster House.

"Our committee has been appointed as a watchdog over the insurance industry for the next four years, so we won't be going away," he warns.