Insurance companies have been accused of making hundreds of millions of euro while putting small businesses at risk of closure. Junior finance minister Michael D’Arcy claims he is “not afraid to take on” the insurance companies, suggesting that they are taking advantage of customers.
Speaking during a Dáil debate on a Fianna Fáil motion, Mr D’Arcy, who holds special responsibility for insurance and financial services, said companies can no longer justify the level of hikes on premiums. He acknowledged the State does have a role to play, especially in ensuring excessively high payouts are not the norm, but he told the Dáil that the insurance industry “needs to reflect” on its current position.
“In a period of buoyant profitability, three major firms have made a combined profit of over €200m and there seems to be increasing premiums, very significantly in certain sectors of the market, or else withdrawing from these markets altogether,” said Mr D’Arcy. “Insurers are being selective about the risks they will cover and they are picking and choosing the prices in such a way as to maximise profits at the expense of small businesses in particular.
“I really believe that most people in the House would agree that it is very difficult to justify such behaviour in an environment where significant profits are being made.” Calling on insurance companies to give policyholders “a break”, he said continued price increases “risk closing down many businesses, with major concerns for much of civil society as we currently know”.
However, Fianna Fáil’s Michael McGrath said the Government has taken “little practical action” to tackle what he described as an insurance crisis faced by play centres, pubs, nightclubs, hotels, leisure centres, and other small businesses. “To give just one example, a children’s play centre I am familiar with had an insurance bill of €3,500 in early 2016,” he said.
“This increased to €5,500 in 2017 and to just under €10,000 in early 2018. “The renewal quote for the next 12 months is almost €18,500. This play centre has had no claims since it opened a decade ago. It is now facing closure with the loss of jobs and a valuable local amenity.” Sinn Féin’s Maurice Quinlivan said one could be mistaken for thinking insurance companies are struggling to operate in the Irish market due to the much-cited excuses of fraud and the high cost of claims, but he said the reality is very different. “In the past few weeks alone, Aviva Ireland posted profits of €113m, up €14m on 2017,” he said. “RSA Insurance announced profits of €35m for the past last year, while FBD Insurance reported profits of €50m.”