Mart insurance to remain 'stubbornly high' until there is a change in accident frequency, FBD warns
Mart insurance premiums will remain stubbornly high until there is a change in the severity and frequency of accidents, FBD Insurance has said.
In recent years marts have been under increasing pressure due to exorbitant insurance claims being charged as a result of increased accident claims.
In a statement released by FBD today, a spokesperson said that high insurance premiums are unlikely to change until accident rates at marts decrease.
“Insurance works on the premise that the premiums of the many pay for the claims of the few. Unfortunately until there is a change in the frequency and severity of accidents in marts, mart premia will remain stubbornly high,” the FBD spokesperson said.
“The operating environment for marts has changed significantly in recent times. Less docile animals are being presented for sale as part of a changing livestock mix in Ireland and this combined with the age profile of some mart patrons presents a very challenging environment.”
They added that reduced commodity prices and reduced trading volumes mean that many marts aren’t able to invest in safety infrastructure that could prevent accidents and save lives.
“Marts have been and continue to be a loss-making sector for FBD, with claims in marts equating to 144pc of the premia charged from 2013 to Q3 2018. This is not including the cost of managing claims, the cost of sales and staff, and the cost of risk management for this sector,” they continued.
They said due to the severity of the injuries in marts, the average settlement takes longer than average, further adding to legal fees and other costs in Ireland’s inflated claims environment.
The insurance company said it has also seen instances where mart management have exposed employees and the public to practices that the courts have deemed negligent, further increasing the court awards.
FBD recommended that mart operations urgently need to change long established practices and aging facilities in order to avoid exposing farmers and employees to unnecessary risk of injury.
It has also developed a new “Safe Management of Marts” training DVD and a short safety advertisement for members of the public a “Voluntary Code of Practice for Safe Mart Management (Mart Lockdown)” in conjunction with ICOS.
“The adoption of this will help any mart reduce the level of interaction between people and livestock and resulting injuries. Reduced injury levels are already evident in those marts who have adopted the code,” it stated.
“FBD is hopeful that a turning point has been reached this year and that through the adoption of expert risk management and investment in upgraded facilities we will see an essential reduction in accidents. “
Mart managers and auctioneers recently voiced their concern that new mart regulations introduced on January 1 would only increase pressure on marts already struggling to cope with rising insurance costs and red tape.
The rules include a ban on sales of calves under 10 days and a ban on the use of sticks on calves under 42 days.
Kilkenny Mart auctioneer George Candler said rising insurance costs coupled with the new rules mean some marts could close.
"Insurance costs are a real problem, a big expense that many marts can't afford. Premiums are five-figure sums in some cases. Some marts will have to question if the mart is viable and that they are not just working for the insurance company," he said.
While ICOS Livestock Executive doesn’t foresee the new rules leading to closures he said: “What I do foresee leading to the closure of marts in the not too distant future is the unsustainable insurance rates those marts are being forced to pay."
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