A group of civic and business groups will today formally launch a campaign aimed at reducing the cost of insurance in this country. The Alliance for Insurance Reform is made up of 18 organisations - which in turn represent 35,000 members and more than 620,000 employees.
The Alliance's spokesperson Peter Boland said that businesses have seen insurance move from being a service to a threat. "Insurance costs have been going up right across the board," he said. "A piece of research we've conducted suggests that nearly half of our members have seen increases of over 30% over the last three years and one fifth have seen increases of over 70%."
Peter Boland said that compared to the rate of inflation, which has been exceptionally low in recent years, the increases were "stunning". That is putting pressure on businesses, in some cases forcing them to defer investments or alter plans. According to the Alliance's survey, many even see it as a threat to their survival. "45% of the organisations that responded to the research said that insurance premiums are threatening their future, it's as existential as that," Mr Boland said.
The Alliance is seeking serious and immediate action to address this, with a number of measures being suggested. Key to the proposals is transparency as the Alliance wants a clearer picture on how insurance rates are calculated. It also wants more information on claims - including the costs involved and the reasons why they might have been settled. "There's no transparency within the insurance industry," Mr Boland said. "Our members don't get any or enough information on how, when and why claims are settled - transparency is absolutely critical."
The Alliance also wants more done on exaggerated and misleading claims - with the organisation calling on insurance companies to work harder to discourage them, rather than taking the more cautious route of settling at the outset.
Insurance companies would say that they are in agreement with the Alliance and that they want to see insurance costs go down just as much. However when asked they tend to point the finger towards the courts, blaming the high cost of claims as the main driver of bigger premia. Mr Boland said the lack of transparency makes this hard to verify as there is no data either way to confirm or refute such a claim.
He also said that a lot of time and energy has been spent on reports and recommendations in the area - but what businesses needed was action. "There has been a lot of chatter around this issue over the last 18 months or so but between commissions, committees and working groups we're not seeing the effect of it in terms of premiums," he said. "It already is an existential issue and it's critical to our business members," he added.
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