Holly Cairns
Question:96. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to address rate insurance premiums faced by SMEs. [29564/23]
View answerThursday, 22 June 2023
Questions (96)
Written answers
As the Deputy will appreciate, neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive).
Nevertheless, this Government recognises that insurance costs remain a significant issue for certain SMEs, and has therefore continued to prioritise reform of this sector via the whole-of-Government Action Plan for Insurance Reform.
A key ongoing reform, which is of particular relevance for SMEs, is legislating to rebalance the “common duty of care” via amendments to the Occupiers’ Liability Act 1995. This Department of Justice legislative change is expected to be passed this summer and should help to reduce frivolous claims proceeding to litigation. In time, cost savings from reduced claims should also help to lower premiums for businesses, particularly those engaged in high-risk/heavy-footfall areas, where claims associated with ‘slips, trips and falls’ are more prevalent.
In my engagement with industry, I have stressed the need for insurers to reflect all savings from this wide-ranging Action Plan via reduced premiums, and to increase their risk appetite. There are clear signs that the market is responding to the reform agenda, such as incumbent insurers expanding their product offerings into areas including SMEs. It is the Government’s intention that further improvements will emerge as the reforms continue to take effect over time across the market.
According to the Central Bank of Ireland's NCID last Report on Employers’ Liability (EL), Public Liability (PL) and Commercial Property insurance, 57 per cent of package policies were for a premium of less than €1,000, and 92 per cent of policies had a premium of less than €5,000. This would appear to indicate that for the vast majority, premiums seem broadly within a range with what one might expect for the size and distribution of businesses.
I understand the next NCID Report on Employers’ Liability (EL), Public Liability (PL) and Commercial Property Insurance covering 2022 will be published in Q4 this year. A mid-year report due next month will cover first six months of 2022 and include data on the cost and numbers of claims, and channel of settlement.
However, I acknowledge that certain difficulties remain in this sector. I am therefore committed to working with colleagues to complete outstanding reforms, and monitoring their impact through the NCID, with a view to achieving improvements in both the cost and availability of cover for SMEs.