The Government recognises that the Professional Indemnity (PI) insurance market has been hardening in recent years, in Ireland the UK and internationally. Insurers in many countries appear to have tightened their policy terms, increased premiums and overall seem more reluctant to underwrite the same level of risk as before. Events in recent years such as the Grenfell fire (particularly in relation to construction related PI insurance cover), Brexit and the COVID-19 pandemic have had an impact on the market, particularly in Ireland, where a significant level of specialised cover has been provided by UK underwriters.
In light of the concerns felt by many groups, particularly businesses, around the cost and availability of insurance, the Government has prioritised reform of the insurance environment. The Action Plan for Insurance Reform therefore sets out 66 actions which aim to bring down costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden that insurance costs can have on business, community and voluntary organisations.
I would note that significant progress has been made to date on the implementation of these key reform including the establishment of the new Office to Promote Competition in the Insurance Market within my Department. In his capacity as the Chair of the Office, Minister of State Fleming has held number of bilateral meetings with major insurers on a wide range of issues The work of the Office includes engaging with sectoral stakeholders to understand gaps in the insurance market, with a view to expanding the risk appetite of existing insurers, and to understand the trends in the market as a whole. It is also involved with bodies such as the IDA in exploring opportunities for new entrants in order to increase the availability of insurance, including specialised cover in areas such as PI insurance. Minister Fleming will continue to update the Sub-Group on Insurance Reform on the Office’s work progress.
In conclusion, while the issues that have contributed to the hardening of the Professional Indemnity insurance market are international in origin, it is my firm belief that implementation of the Action Plan should assist in attracting such insurers into the Irish insurance market when it begins to improve again, including in the construction sector.
