I thank the Ceann Comhairle for the opportunity to raise the matter of the need for the Minister for Enterprise, Trade and Employment to take urgent action to halt the escalation in the cost of insurance which is having a very damaging effect on economic and social life, and the need for the full implementation of the recommendations of the Motor Insurance Advisory Board. My reason for raising this issue on the Adjournment and my message to the Minister are stark – the great insurance rip-off continues and it demands radical action. Jobs are being lost, companies are closing down, and business and commerce are being damaged by the scandalous and still spiralling cost of insurance cover.
It is mostly small firms which are being crippled and there are many examples. I know of a company in County Meath which had to shut down with the loss of 12 jobs because there was a 200% increase in its insurance premium. A firm in Monaghan saw its premium jump from €100,000 in 1999 to €260,000 this year. A small engineering firm which started up in 2000 saw its insurance bill leap from €2,000 in that year to an unbelievable €27,500 in 2002. Despite this company's claim free status, it is unable to get a quote.
These are but a few random samples from studies conducted within the industrial sector. They are indicative of the massive rip-off being perpetrated. A survey by Irish Small and Medium Enterprises, carried out last winter, has shown the average increase for insurance cover experienced by its members was 71% in 2002. One in five companies reported job losses in 2002 as a direct result of intolerable insurance cost rises. When this is seen in the context of the current general economic downturn in which job losses are mounting, the devastating effect is obvious. The Government may not be able to effect change in the global marketplace but it can do something about the fleecing of people in this State by rapacious insurance companies.
This was one of the main issues raised by the electorate, especially as it affects drivers, with all parties during the last general election. The Motor Insurance Advisory Board reported and last October the Tánaiste and Minister for Enterprise, Trade and Employment announced a programme of measures, including the establishment of the Personal Injuries Assessment Board on an interim non-statutory basis. I welcome the priority given to this issue by the Minister, but regrettably the measures are too limited. They treat the insurance companies and especially the legal profession with kid gloves. The Minister of State must be aware of this and I have no doubt he agrees that the rip-off must be addressed head on. Roundabout approaches and half measures are not enough. There must be direct Government control of insurance prices.
The Minister and the civil servants will respond by saying that European Union regulations prevent such State intervention in the insurance market. I do not have the legal expertise to refute that contention, but if it is the case and if there are EU imposed obstacles to the necessary measures, the Minister is duty bound to campaign, lobby and negotiate within the EU to remove them.
Another, little mentioned, aspect of the insurance rip-off is its damaging effect on social life. Sports clubs, voluntary bodies of all kinds, community groups and many others often find it impossible to organise fundraising and other events which were once their bread and butter. This is because they cannot afford the exorbitant cost of public liability insurance cover. It is stifling community life.
The measures already announced by the Government do not go far enough. I hope the Minister of State will acknowledge this and indicate the additional measures the Minister and the Department are prepared to take. More radical and comprehensive action is needed. I eagerly await the Minister of State's response.