Dáil Éireann Debate, Tuesday - 2 April 2019
126. Deputy John Curran asked the Minister for Finance his views on the number of soft play centres for children that are being forced to close down on account of the high cost of business insurance; and if he will make a statement on the matter. [15281/19]
View answer134. Deputy Kate O'Connell asked the Minister for Finance the actions he is taking to address the concerns of owners of indoor play centres with regard to the unsustainable increase in insurance costs which is causing many of these businesses to close down; and if he will make a statement on the matter. [15480/19]
View answerI propose to take Questions Nos. 126 and 134 together.
I am aware of what appears to be a growing issue of indoor/soft play centres closing due to increased insurance costs. As the Deputy will appreciate, data on the exact numbers of play centres closing is not collected by my Department nor the Central Statistics Office.
My understanding is that the main reason for the difficulties being faced by the play centre sector is due to a lack of capacity in the insurance market, which I understand has been driven to some degree by the overall claims level in the sector. In determining their willingness to enter into or remain in a particular sector of the market, insurers will generally make an assessment of what they consider the overall risk to be. Therefore, part of their assessment of what premium level to charge, or whether to offer cover in the first place will be based on what they consider the general likely trend for claims in the sector will be, based on their overall past experience.
In a recent meeting with Insurance Ireland, I understand that Minister of State D'Arcy, who has responsibility for Insurance within my Department, raised the issue of the difficulties play centres currently face in securing insurance. In response, Insurance Ireland highlighted the problems that Irish insurers encountered in this sector regarding claims and specifically the high amounts being paid out. Having said that, Insurance Ireland agreed to relay Minister of State, Deputy D’Arcy’s concerns to its members taking into account some of the implemented and proposed Cost of Insurance Working Group reforms, including the proposal to implement the recommendations of the second Personal Injuries Commission Report.
As the Deputy will be aware the Cost of Insurance Working Group (CIWG), which was established in July 2016, has undertaken a detailed examination of the factors contributing to the cost of insurance in order to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for consumers and businesses.
The CIWG has produced two reports and eight quarterly progress updates on the various recommendations made by CIWG and endorsed by Government. The difficulties facing the consumer, voluntary and small business sector from the high cost of insurance premiums are recognised. In addition, it is also acknowledged that in some cases the survival of a business as a viable entity is being put at peril because of insurance pricing. One of the key areas raised by various stakeholders to the CIWG is the level of awards in this country compared with elsewhere. As a result, the Working Group established the Personal Injuries Commission (PIC) and commissioned it to examine this issue amongst other things. The PIC reported in September 2018 and concluded that soft tissue injuries are significantly higher here than in the UK and other jurisdictions and recommended that action be taken to address this disparity through the establishment of the Judicial Council. The PIC recommended that this body would become responsible for preparing the guidelines on personal injury award levels, and would replace the Book of Quantum. In doing this, the PIC believes that the Judicial Council will, in compiling the guidelines, take account of the jurisprudence of the Court of Appeal and the results of its benchmarking exercise.
The current position with the Judicial Council Bill is that the Minister for Justice and Equality has recently advised of his intention to further this Bill with a view to having it in place as soon as possible. I understand the Bill is scheduled for Committee Stage in the Seanad next Tuesday. Alongside this, the Law Reform Commission has included the subject of capping damages in personal injuries litigation in its 5th Programme of Law Reform and this project is being given immediate attention. It is hoped that if there was a significant move in this area, it could have an impact on insurance pricing and could also help attract new entrants into the market. Such outcomes would be of benefit to all concerned and in particular to small businesses such as those in the play centre sector.
