Hoteliers urge Government to tackle 'alarming' insurance cost increases

Michael Magner, president of the Irish Hotels Federation: 'The exceptionally high cost of doing business in Ireland is one of the most serious challenges facing our sector. This includes insurance costs, which continue to increase at alarming rates.'

Hoteliers have urged Government to tackle high insurance costs and argued many operators have not seen changes to their premiums despite reforms.

The Irish Hotels Federation (IHF) said “excessive” insurance rates continue to burden operators amid other cost pressures.

“The exceptionally high cost of doing business in Ireland is one of the most serious challenges facing our sector. This includes insurance costs, which continue to increase at alarming rates,” said IHF president Michael Magner.

Mr Magner added “much more needs to be done” for savings to be passed on to customers.

“This must go hand-in-hand with a renewed effort by Government to attract additional insurance providers into the market,” he said.

Mr Magner made his comments following the publication of a report by the Central Bank which found insurance companies providing employer’s liability and public liability cover to Irish businesses made a combined operating profit of €176m in 2022 after taking in nearly €1.3bn in premiums.

Mr Magner said the National Claims Information Database released by the financial regulator showed “a significant increase in profit margins for insurance companies while legal fees also skyrocket.” 

'Unacceptable'

“This is unacceptable and must be tackled head-on to ensure a fairer and more competitive insurance market,” he said.

He added rising premiums had hit the hospitality sector particularly hard, as insurance costs increased 24% for food and accommodation service businesses between 2020 and 2022, according to the Central Bank report.

Meanwhile, industry research carried out by the IHF found premiums continued to increase, with some 84% of hotels and guesthouses saying they were concerned about the impact of insurance costs on their business over the next 12 months. 

This is according to a survey based on responses from owners and general managers of hotel and guesthouse businesses across the country which was conducted during February 2024.

Elsewhere in the hospitality industry, food-led businesses have ramped up efforts to try and secure a lower Vat rate as stubbornly high businesses costs continue to bite.