The Insurance Industry (18 Days To Election)

How much did you pay for insurance for your home and its contents in the last year? How much did you pay for your healthcare insurance? How much did you pay for insurance for your car? How much did your nearby amenities, sporting clubs, cinemas, retail outlets pay? How much did the charity shop have to fork out? I’m going to take a stab in the dark and suggest a common answer: more than you/they paid the year before.

Amid what my uneducated brain can only call valuation inflation and the allegations that “fraudulent claims” are out of control, the cost of insurance, especially that for cars and “public liability”, has spiralled out of control over the last few years. Make no mistake about it, this problem is a ticking time bomb in our society that, if left unchecked, could be a very significant disaster on a social and cultural level. We have started to see events cancelled and sporting clubs go under on a small scale, but that will get out of control very quickly if nothing is done. Your standard junior soccer team, underage GAA outfit or athletics club will simply not be able to afford ever-raising premiums, and will have to move into non-functionality as a result.

As for cars, there is an argument to be made that we should be using as many financial disincentives as possible to reduce their use, especially in the capital, but the rising cost of car insurance has little to do with environmentalism. It is yet another example of a daily life tax that is being hiked up and up by companies that, in my opinion, are not being regulated enough. Demographic statistics and penalty point record are increasingly meaningless really, when everything is being pushed to the limit.

What are the party’s saying or promising to do on this issue? It’s a key litmus test really, on whether a group is on the side of small government, deregulation and “the market”, or whether they prefer big government, regulation and a firm controlling hand. As always, I will update as manifestos are published, which seems to be taking a while.

Fine Gael are probably one of the worst parties to be approaching this question, considering the Maria Bailey scandal. It was a picture perfect example of a scurrilous public liability claim that, it is claimed, pushed premiums up for everyone else, and it was carried out by a government TD. Fine Gael is, or rather was, in the process of setting up a judicial committee whose job it would be to set guidelines for personal injury awards, which presumably would be significantly lowered from their current level. However it is a slow and labourious process, and a bill connected to the idea first introduced last March was still lodged in the mire of committee stage when the Dail was ended. As with much of Fine Gael’s efforts in government, their approach is a case of stuttering procrastination. Their manifesto promises a lot in terms of more Garda resources and increasing transparency of claims, but it’s not convincing.

That bill is actually a Fianna Fail invention. Naturally the party is happy to criticise the very government that they prop up on the matter, while not exactly pushing very hard for their own legislation to actually get through the Oireachtas. It seems enough that it exists, and can be used as a stick in an election. To quote Mary Butler, Fianna Fail spokesperson for the Elderly, recently, “Fianna Fáil is the only party putting forward real solutions and has backed them up through legislation”. The fact that such legislation, by necessity, needs Fine Gael’s support to live apparently did not seem like something worth mentioning. Their manifesto has some welcome details in its insurance section, but its all very much like Fine Gael’s ideas, just worded slightly differently.

Sinn Fein are a bit more direct, promising to do away with the 5% government tax on premiums, something that will amount to the region of €230 million. The issue is something of a rallying cry for Sinn Fein as of late, with promises to make up for the shortfall by taxing banks. The iffyness of the party’s financial plans has always been a weakpoint, and one suspects that €230 million, when diluted down to the individual tax payer, may not make all that much difference. But it is at least something concrete, and Sinn Fein, through Pearse Doherty, are one of the only parties consistently calling out insurance companies for their repeated falsehood that “claim culture” is to blame for the crisis. Their manifesto has a lengthy section outlining many good ideas on the topic.

Labour have called for local councils to use IPB cover that they control to extend to the kind of events that were being cancelled over the last year. IBP Insurance is a “state-owned mutual insurance company, owned by local authorities, ETB’s, regional assemblies and the HSE” if, like me, you weren’t aware of its existence. It’s not a bad idea, but it is very much a metaphorical band-aid, that doesn’t really do anything to solve the wider problem. Apart from that the party has said very little on the topic. Their manifesto calls for “Pooled Group Insurance”, essentially a kind of collective bargaining for different groups.

Solidarity-PBP has little on the issue that I can find, other than a brief “Create a
publicly owned insurance company to cut costs.” on their manifesto. It would appear that insurance company already exists, and again its just a band-aid considering that it is the wider industry that needs to be reined in. The hard-left TD’s, and I suppose you can include Independent4Change in that (Deputy Collins made the salient point in December that it is easy to get PLI for putting up posters, but not for creches: which is more important to society?), say all of the right things in terms of opposing rising insurance costs, but there is little of substance beyond that.

The Green Party are, well…

gpins

I guess it just isn’t really their focus at the moment. It should be though: the accusations that the Irish Green’s are a bit too cozy to Ireland’s capitalist foundations might have less to them if they could come up with a workable policy to combat insurance costs. Their manifesto doesn’t touch the issue. Disappointing.

The Social Democrats back the governments judicial committee plan, but have called for the process to be speeded up. They also want more support for Garda investigation of false claims. More concretely, they have proposed the creation of an Oireachtas Committee on Consumer Affairs, whose remit would include investigation of under-regulated private insurance entities. Not bad ideas, even if a large chunk of it is simply backing what Fine Gael has nominally been trying to do. They have a lengthy section on this issue in their manifesto, that actually splits the issue up into its constituent parts, which is good to see.

Lastly, Aontu, or rather Peadar Tobin, have/has called for the government to set-up some manner of public anti-fraud squad to investigate false claims. I think the problem with that is that such a entity already exists and it is called the Garda, but insurance companies don’t seem very inclined to press too hard for fraudulent cases to be investigated. The party’s manifesto calls for more support for Garda to investigate false claims and reforms to the Book of Quantum, which is nothing different to what anyone else is saying.

I suppose it is Sinn Fein and the Social Democrats that I would award the highest marks to here, with the Greens and Aontu dead last. Will anything ever happen though? I suppose whatever government is installed after February 8th will keep the slow wheels turning on the judicial commitee and Civil Liability Bill, but they can hit a brick wall at any time. More radical change would be needed for anything to really happen.

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