Businesses still face costly insurance in spite of reform

13 April 2024

Wage costs may be in focus now, but high premiums still remain.

Since the start of the year numerous business groups have been raising concerns about the increasing cost of doing business, largely due to wage-related changes by the Government, but flying under the radar is the cost of insurance which has been increasing despite attempts at reform.

These increasing costs have new Taoiseach Simon Harris reportedly considering a €70m tax boost for businesses as well as a potential pause on plans to increase sick leave entitlements. 

However, while these growing costs have been at the forefront of public attention, the increasing cost of insurance has gone largely unnoticed despite attempts by the Government to reform the sector over the last several years.

Chief executive of the Alliance for Insurance Reform, Brian Henley, said businesses would be happy with any breaks across their many expenditure lines at the moment “insurance being one of them”.

He said:

It is human nature to focus on the next crisis but that is what is being banked on in some respects, that the focus is elsewhere. But it can’t be.

“It hasn’t gone away, the figures would suggest it is getting worse.” 

Well before these current cost pressures many were already struggling with rising insurance costs, as shown by a recent report from the Central Bank  which reveals premiums for public liability and employer’s liability insurance have only gone up.

During 2022, there were 318,000 policies covering employer’s liability insurance, public liability insurance, and commercial property insurance. Of all these policies, 86% were taken out as part of a package policy.

The average premium for these packages cost €2,781 in 2022, an increase on the €2,474 recorded in 2022. Insurers in this segment took in €1.3bn in premiums in 2022 — an increase from the €1.1bn in 2021.

Chief executive of ISME, Neil McDonnell, said over the last few years, despite attempts at reforms, premiums paid by some businesses have been going up along with inflation while others are finding it hard to get cover.

This is all in spite of measures by the Government that tried to bring down the cost of premiums and make the market more attractive to new entrants.

Personal injury claims

Mr McDonnell said that businesses involved in dynamic activity — such as sport, adventure, children, equestrian — are “either getting a quote that is unaffordably high or you are being refused a quote altogether”.

On the other side of all of this, the insurance sector has been struggling for more than a decade. The report noted that 2021 and 2022 were the first years since 2011 that this segment of the insurance sector recorded a profit — of €98m and €176m respectively.

It also shows that of all injury claim settlements in 2022, 70% were settled via litigation before a court award, with 3% settling after a court award.

Litigation not only usually results in a higher award but also higher legal fees. Litigated settlements for employer’s liability cases resulted in an average compensation of over €70,000 and €40,000 in legal fees.

Public liability cases saw similar results, with the average payout for litigated settlements reaching €37,000 and legal costs reaching over €28,500. In comparison, just 12% of cases were settled through the Personal Injuries Assessment Board — which is now known as the Personal Injuries Resolution Board (PIRB).

Legal fees

Settlements through PIAB averaged over €26,300 for employer’s liability claims and over €21,400 for public liability claims. Legal fees for both were under €2,000.

Mr McDonnell said solving the issue of high insurance costs is like a game of whack-a-mole — when one problem seems to have been solved another one pops up — pointing specifically to the cost of legal fees that come with litigating cases.

He said the underwriters have to pay the legal costs in cases and this ultimately gets passed on to customers.

“The number of cases are going down, the awards in those cases are going down but the legal costs are the same or going up,” Mr McDonnell said.

Since December 2020, the Government has been making its way through its Action Plan for Insurance Reform which set out 66 actions aimed at making the sector more competitive and consumer-friendly. As of February, it has implemented 63 of these recommendations. 


In April 2021, new personal injury guidelines were introduced aimed at reducing the size of pay-outs. Prior to this, compensation was with reference to the Book of Quantum which often resulted in higher pay-outs, particularly if the case was litigated.

According to the PIRB, the new guidelines have seen an average of a 41% reduction in pay-outs across all insurance categories including motor insurance, public liability, and employer liability. 

However, the report by the Central Bank shows that between 2021 and 2022 just 24% of personal injury claims in 2022 were settled under the guidelines while 76% were settled using the Book of Quantum.

Rising premiums

A recent survey of 690 Alliance for Insurance Reform members found that 87% have reported a premium increase or at least no reduction in premium costs despite all the reforms. In addition, 91% said they’ve yet to materially benefit from the Government insurance reform agenda.

This is echoed by a survey of Dublin pubs in October last year — conducted by the Licensed Vintners Association — which found the average insurance premium rose to €29,811.62 in their most recent renewals, an increase of over €1,700 compared to the previous year.

“It is a continuation of the increases that the Central Bank data shows. We’re still seeing premiums on the rise,” Mr Hanley said, adding that the lack of premium reductions has been “enormously frustrating” for their members.

“At a time when pressures are so tight on finances, it is added pressure. It is a great frustration when so much has been done,” he said.


While reforms is one thing, Mr Hanley recognised that the lack of competition in the sector is also an issue that has to be worked on.

According to the Alliance survey, 25% of those who replied operate in a sector where there is just one underwriter.

“Another key area that we need to see progress on is competition because it is a much more attractive market now in which to do business because of all these reforms,” Mr Hanley said.

During the week, the Supreme Court ruled in a case brought by Waterford woman Bridget Delaney which challenged the introduction of these guidelines.During the week, the Supreme Court ruled in a case brought by Waterford woman Bridget Delaney which challenged the introduction of new personal injury guidelines.

Ms Delaney challenged the constitutionality of the guidelines after she was awarded €3,000 by PIAB for an ankle injury. She was advised it could have been as high as €34,000 under the previous regime.

However, the Supreme Court rejected this finding, ruling that the guidelines are legally binding and will remain in force.

This has led to the Alliance for Insurance Reform to call for a substantial drop in premiums as a result of the ruling.

The ruling was also welcomed by Insurance Ireland which represents providers in the State.

Mr McDonnell said following the Supreme Court ruling, the Oireachtas should consider a cap on legal expenses to further reduce costs. 

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