Insurance hikes ‘cost 3,000 jobs’

THE 290% hike in insurance premiums over the last four years has cost 3,000 Irish workers their jobs and closed 100 companies, ISME claimed yesterday.

Speaking at the Marsh Conference entitled ‘From Factory Floor to Courtroom Door’, ISME Chief Executive, Mark Fielding, castigated the insurance industry for what he described as their irresponsible mismanagement, hypocrisy and arrogance in attempting to stifle the benefits of reforms introduced to address the out of control insurance premium increases being suffered by business customers. He accused the industry of profiteering on the backs of the small business community.

Mr Fielding said an owner/manager who was paying €10,000 for insurance in 2000 is currently being asked to pay in excess of €39,000 for the same or, in some cases less, cover.

“The only way that many businesses can absorb the increases is to make cutbacks in other areas. This is leading to a curtailment of many companies’ future growth plans as well as the growing number of redundancies.

“Exorbitant and prohibitive insurance costs are also acting as a barrier to start-ups, with would-be entrepreneurs choosing to stay in the safe shelter of employment, thereby stifling any new wealth and job creation,” he said.

Mr Fielding believes Ireland’s competitiveness is being drastically eroded and referred to previous ISME research which has found that the cost of insurance now represents an average of 2.5% of turnover.

He said that many companies are now spending more on insurance than on marketing, training or research and development. The alternative to paying these premiums is for a company to operate without insurance. As an economy based on asset ownership, this situation is fraught with danger and completely unsustainable, said Mr Fielding.

“This crisis situation has been created, manipulated and executed by the vested interests within the Insurance Industry Federation,” he argued.