Dáil Éireann debate -
Tuesday, 24 Mar 1998

Vol. 488 No. 7

Written Answers. - Insurance Costs.

Bernard J. Durkan

Question:

78 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the various categories of employment which prompt insurance companies to increase the cost of cover for people in these occupations; if she will seek clarification as to the reasons for the increased cover costs under these headings; and if she will make a statement on the matter. [7334/98]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I understand that individual insurers calculate employers' liability premium rates on the basis of their own underwriting experience, for particular business activities and the level of risk involved in such activities. While certain categories of employment would of their nature be regarded as higher risk, for example, construction activity, there is no indication, in so far as our Department or the Irish Insurance Federation is aware, of any recent significant increases in the cost of insurance cover for employers in any particular subsector of economic activity. If such increases were to occur they would be prompted by an increase in the frequency and cost of claims.

The Deloitte and Touche report on an economic evaluation of insurance costs in Ireland found that smaller companies are generally regarded by insurers as lacking in sophisticated safety management procedures and, therefore, represent a higher risk class than larger firms. Smaller firms are, therefore, charged higher premium rates and this places them at a competitive disadvantage.

Deloitte and Touche recommended that small businesses should establish or join affinity groups to strengthen their collective bargaining power with insurers and that they should seek to improve their risk management procedures through greater awareness of and compliance with health and safety standards. Following these recommendations, a number of special affinity schemes have already been successfully established by, among others, the Construction Industry Federation and by publican, restaurateur and farmer groups.

In addition, an affinity scheme for the services and self-employed sector of ISME was launched earlier this year, and these affinity schemes have assisted in alleviating the insurance cost burden borne by Irish businesses affiliated to these schemes. An initiative by the IBEC-ICTU working group on safety in the workplace is aimed at improving safety management procedures among small firms.