Vol. 548 No. 5
85 Mr. N. O'Keeffe asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures she plans to take to deal with spiralling insurance costs; if her attention has been drawn to the devastating impact and hardship being imposed on businesses arising from the recent substantial increase in insurance costs; and if she will make a statement on the matter. [5346/02]
I am very aware of the substantial increases in insurance premiums that many businesses are facing and of the problems this is creating for them.
The pricing and underwriting of insurance is a matter for insurance companies. EU law prevents me and the Department from intervening in relation to the matter of premium levels or in respect of what risks they are prepared to underwrite. Insurers make decisions on provision of cover based on their assessment of that particular risk.
The insurance industry has pointed to a number of factors, both domestic and international, to explain these increases. These include the high cost of settling claims, the general reduction in investment returns, recent court decisions regarding the calculation of compensation losses in personal injury cases and the affects of 11 September attacks in the United States. The situation has not been helped by the failure of the UK authorised insurer, Independent Insurance Company Limited, who had a significant presence in the Irish market.
An interdepartmental implementation group is progressing the establishment of the personal injuries assessment board. I am confident that its establishment will achieve a reduction in the delivery costs of personal injury compensation, thus permitting a reduction in insurance costs to consumers.
A workplace safety group has been established with a view to improving health and safety standards in the workplace. The objectives are to reduce workplace accidents, to encourage injured workers to return at the earliest possible date to the workplace and to improve claims handling procedures, thus reducing insurance costs. At present the group is developing proposals designed to bring the initiative to small and medium sized firms.
I encourage consumers and insurers to consider ways of reducing the worst effects of the current circumstances, for example by better management of risks, examination of excess covers and whether the full extent of the cover included in policies is required.
