The State must now seriously consider intervening in the insurance market to ensure the survival of businesses affected by insurers’ decision to withdraw from the Irish market. My colleague on the Finance Committee, Pearse Doherty, has written to the European Commission seeking clarity on where and when the State can enter the insurance market.
The news that insurance provider to the leisure sector will no longer renew premiums will worry many other sectors that have faced similar difficulties in obtaining quotes and renewals from insurers. Quite apart from ever increasing premiums, the prospect of no insurer offering to cover businesses means the insurance market is now fully dysfunctional.
AXA XL is the company that has most recently refused cover to leisure companies and facilities in Ireland. Last year Government ministers hailed the fact that this same company had moved its European headquarters to Ireland. If this trend continues, there will be hundreds of job losses that will outweigh any benefit of being the location for major insurance companies.
The Government need to sit down with the insurance companies and tell them straight – if they refuse to cover businesses, then the State will intervene. They should know that the State’s involvement might include already profitable areas of the market. This would force the companies to act one way or the other.
There is no point at all in the Government appealing to the insurance companies not to let indigenous companies suffer as a result of their decision. Pressure and persuasion does not work with the insurance companies. They need to be hit in their pocket either through a super tax or by introducing competition into the market.