Over the past year the Irish insurance industry has been beset by problems. FBD made a loss of €4.5m last year, RSA is still recovering from accounting issues and yesterday Liberty announced it will lay off 270 staff over the next 18 months and warned of difficult trading conditions here.
Meanwhile a meeting of the creditors of Setanta Insurance takes place this morning in Malta, where the company was registered and regulated, as the long process to wind up the insolvent insurer continues. Among the matters to be discussed at the meeting is a report by the liquidator's legal counsel advising on whether proceedings should be instituted against directors and shadow directors of the company. Setanta went bust last year leaving its customers without cover and with its assets nowhere near enough to cover the value of outstanding claims.
Jonathan Hehir, broker and founder of coverinaclick.ie, says it is proving very difficult to make any money in the insurance sector lately due to a lot of factors, which are all now coming to a head. Insurance companies have had low pricing for the last five years, they are seeing no return on any of their investments and the huge claims culture seems to be making a return. Mr Hehir also says there will be a knock-on effect from the Setanta Insurance collapse and the public may end up paying for that.
Predicting that premiums will increase this year and maybe next as well, Mr Hehir says the increases will not just affect motor insurance but also liability insurance, which will hit businesses. He says he does not actually know why there are so many insurance companies - especially motor insurance firms - operating in the Irish market, but speculates that some may decide to leave in the future, just as Liberty Insurance said it was leaving the UK market yesterday.
MORNING BRIEFS - Since the start of this year 59 companies each day have closed their doors in Greece. That means 613 jobs are lost every 24 hours at a total cost per day of €22m to the Greek economy. The lengths to which Greek businesses are having to go to survive illustrated by an anecdote in this morning's Financial Times which spoke to Nikos Vasiliou who has taken to flying his export customers into Greece just to reassure them his company still exists.
*** Tesco Ireland's like-for-like sales were down 4.4% over the three months to the end of May compared to the same three month period last year. In a trading statement this morning the retailer said its sales performance in the UK is improving but like-for-like sales there were still down by 1.3% in the quarter.