Over 20 per cent of companies have confirmed they have reduced their workforce mainly because of insurance costs, according to a survey.
A further 40 per cent of respondents in today’s survey of the insurance industry by the Irish Small and Medium Enterprise Association (ISME) anticipate job losses, indicating they would be reducing their workforce by three jobs each on average.
An average of four jobs per company have been lost to date.
The ISME is now calling on the Government to implement the findings of the Motor Insurance Advisory Board report following the publication this morning of the survey.
According to the ISME, the survey confirms that insurance costs increases are the biggest threat to the existence of small- to medium-size companies.
The survey, sent by fax to 3,000 companies on August 12th, was completed by 978 companies, a response rate of 32.6 per cent.
A breakdown of the results shows that 96 per cent of companies said their insurance renewal this year has increased, with the average increase for 71 per cent of companies in the region of 500 per cent.
Less that one in five companies (18 per cent) outlined that they had received an adequate explanation for the increase, prompting the response from 80 per cent of respondents that there was a cartel in operation among insurance companies.
In addition, the surveys shows that, on average, companies are paying 2.5 per cent for insurance as a percentage of turnover.
Other findings were:
- 20 per cent of the companies outlined that the renewal notice for their insurance was received either on the day of renewal, or after the renewal date, with 31 per cent receiving their notice less than two weeks before their renewal.
- Over one in ten companies were refused cover on all or part of their business and therefore have to trade under insured or with no cover what so ever. This has serious ramifications particularly if a number of claims are pursued.
- Of those companies that were refused insurance only 17 per cent received an adequate explanation.