Minister urges Irish insurers to step up and cover crisis-hit tourism and leisure sectors
The minister with responsibility for insurance reform has called on Irish-based insurers to step in to cover the leisure and tourism market.
Michael D'Arcy was responding to the withdrawal of the main insurer for the leisure sector from this market, putting hundreds of jobs at risk.
UK operator LeisureInsure said it would no longer quote for new business in Ireland from this week, and from the end of the month would cease all renewals.
It was one of the last few insurers covering adventure tourism firms, event companies, bouncy castle operators, leisure centres, yoga classes, soccer teachers, drama classes, some play centres and a large number of leisure companies.
Operators in the sector largely rely on British insurers because Irish-based companies are reluctant to provide cover in this area, citing large losses on what is called liability insurance.
Mr D'Arcy told the Irish Independent that Irish insurance firms needed to fill the gap left by the exit of LeisureInsure.
"Awards are going to be reduced," he said, referring to the passing of the Judicial Council Bill, which will enable judges form a committee to recalibrate award levels for minor injuries.
He has no powers to make insurers provide cover, but he called on them to recognise there should be a lowering of risk in the future.
"We now need to see insurance companies recognise that the risk horizon is changing, so they should cover these leisure companies.
"Insurance companies in this country now have to show some goodwill towards firms in the leisure sector and react to the fact that there is now a gap in the market," he said.
An organisation that represents firms in the fast-growing adventure tourism sector said a large number of its member firms are threatened with closure.
The Irish Association of Adventure Tourism (IAAT) said LeisureInsure had been the only option to get cover for many members.
IAAT's members include firms engaged in watersports, cycling and bike rentals, adventure centres, climbing, hiking and whale watching.
Chief executive of the association Brendan Kenny said the group had around 50 members from large corporate adventure tourism firms to one-person operations.
"The departure of LeisureInsure is another blow to the adventure tourism sector, with it impacting directly on a number of our members.
"One of our members is currently insured with LeisureInsure, and Saturday's Irish Independent article was the first they had heard about their imminent departure.
"Another member said they are also covered with LeisureInsure and this news will mean the end of their business if they cannot get affordable insurance elsewhere, which is proving to be a considerable challenge," he said.
Told about Mr D'Arcy's comments, a spokesperson for Insurance Ireland responded: "The passage of the Judicial Council Bill is welcome, but we still do not know when exactly compensation awards will be recalibrated and what the recalibration will look like.
"Insurers have said many times that if claims costs come down as a result of the consistent adoption of recalibrated awards, then customers will benefit."
Alliance director Linda Murray said there was now a direct threat to thousands of jobs in the tourism and leisure sectors.