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Tuesday, 16th April 2024
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Job losses threatened by insurance costs crisis Back  
Over 400 Irish companies believe that increasing insurance costs could put them out of business and have formed the Alliance for Insurance Reform in response.
Rising dissatisfaction with the increasing cost of public liability insurance has forced a group of 400 Irish businesses to create the Alliance for Insurance (AIR). The AIR says that their businesses are being crippled by the rising cost of insurance premiums and could face job losses and company closures it they are not reduced.
The insurance industry has responded by backing the key principles laid out in the AIR mandate but stressed the need for more safety in the workplace to reduce the number of work-place accidents.
The Alliance represents companies from all sectors of the economy and plans to lobby against the rising cost of insurance premiums in personal injury claims. It wants the Government to address the creation of a more inexpensive and efficient legal system for dealing with such claims.
According to the AIR the rising cost of insurance is one of the most serious problems facing Irish businesses and the organisation says Ireland has an ‘out-of-control’ compensation culture. A recent survey by the lobby group ISME found that business insurance costs are escalating at an average of 53 per cent per annum.
At the launch of AIR Pat McDonagh, managing director of Supermac’s and chairman of the Alliance said that ‘Irish jobs will be lost if insurance premium hikes are not reduced immediately. The out-of-control compensation culture, the legal profession which feeds off it and the insurance industry all must be reigned in.’
While the AIR realise that the problem is multi-faceted and very complex, the group says the enactment of the following five actions would have a substantial positive effect on the situation:
• Immediate operation of the Personal Injury Assessment Board
• Pursuing and jailing fraudulent claimants
• Drafting of guidelines by a body, independent of the judiciary, on standardisation of injury awards for both the Circuit and District Court
• Obligation of judges to refer fraudulent/exaggerated claims to the Gardai for investigation.
On the other side of the fence and representing the predicament of Irish insurers, the Irish Insurance Federation has, in principle, backed the five proposals which it believes will help to streamline a system which is highly inefficient and needlessly costly.
According to John Horgan, non-life manager at the IIF, ‘what the AIR is looking for is to improve (Ireland’s) very inefficient system for personal industry claims. We have a very expensive system in Ireland whereby 40 per cent is added to the cost of the claim by legal fees. The inescapable fact is that rising insurance premiums come from the rising cost of insurance claims. There are two ways to improve this - the first is to improve the system, as the AIR suggests, and the second is to also improve the level of safety in the workplace.’

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