Retail Ireland, the Ibec group that represents the retail sector, today launched a new policy paper entitled ‘Tackling rising insurance costs’ (see below). The paper highlights the growing concern amongst retailers that Employer and Public Liability insurance costs are adding an unnecessary burden and limiting the sector’s ability to grow, create jobs and deliver value and choice to Irish consumers.
The retail sector is calling to prioritise the implementation of measures recommended in the Government's publication, ‘Cost of Insurance Working Group's report on Employer and Public Liability Insurance’, on claims transparency, benchmarking the level of personal injury damages, and streamlining the litigation process.
Thomas Burke, Director of Retail Ireland, stated: “Rising insurance premiums, fraudulent claims and general inefficiencies in our insurance market have become a major competitiveness issue for retailers in recent years. Irish retailers are reporting increases in Employer and Public Liability insurance of between 5 and 10 percent in the previous five years, in addition to rising costs across a range of other inputs such as labour, rent and utilities. This is leading to a general erosion of the retail sector’s competitiveness.
“On average, retailers estimate that for every €1 allocated to an insurance claim, the business must make €100 in sales to recoup this outlay. To alleviate rising insurance costs retailers are actively investing in risk mitigation strategies to improve health and safety standards, reduce incidents and limit the cost of claims. Despite tireless work and substantial investment, efforts in this area have been undermined by our inefficient personal injuries regime."
Retail Ireland recommends the:
- Full implementation of the recommendations made by the Cost of Insurance Working Group’s Report on the Cost of Motor Insurance and Employer and Public Liability Insurance
- Provision of additional funding and resources to see the implementation of these recommendations
- Ministerial sponsorship of required changes and all of government support for reform
Mr Burke continued, “Irish retail is currently undergoing significant structural change, competition continues to grow and migration towards online shopping has increased considerably in the past 12 months. These challenges are being felt most by traditional bricks and mortar stores who carry all the burden of costs associated with retailing in the State.
“Pure play online retailers based in the UK or further afield operate off a significantly lower cost base. Rising business costs and increasing insurance premiums have now become a survival and competitiveness issue for many traditional Irish retailers. Therefore, government action is needed to address the threat to the sector's competitiveness posed by our personal injuries regime, if we are to maintain retail’s key economic and social role in Irish society."
- Retail Ireland_Tackling rising insurance costs.pdf - 242 Kbytes