It is the word of every mouth in Ireland that in recent years insurance companies are exiting from Irish markets. The number of insurance companies exiting Irish markets in the past two years is so high that every businessman is talking about it and is uncertain about the future of his business in Ireland. To be precise, nearly 248 companies have exited from Irish markets over the last 6 years which used to offer life insurance, business insurance, and other insurance packages countrywide. Out of these 248 companies, more than half of the companies withdrew in the last two years. On one hand, the number of withdrawing insurance companies is alarming and on the other hand, the existing insurance companies are increasing insurance premiums adding on to the problems of business owners. The business owners of various sectors like hospitality sector, etc. are worried about their business operations in Ireland, increasing insurance and other costs, sustainability of their business, financial security and how they will meet business challenges in the competitive world if they do not buy business insurance Ireland to save cost of high insurance premiums.
The government and the concerned authorities are concerned about the prevailing insurance issues in the country and are trying to amend the situation, so that small businesses do not close down at a fast pace which is happening currently in the absence of affordable insurance options. CIWG (Cost of Insurance Working Group) has made recommendations to invite non-life insurers to begin their operations in Irish markets. It is being considered to implement those recommendations to facilitate affordable insurance to the people of the country. Meanwhile solid and viable measures can be implemented it is important to understand the reasons due to which insurance companies have exited Irish markets over the years. Some of the reasons are listed below:
The prime reason for the withdrawal of insurance companies from the Irish market, as stated by discontinuing insurance companies like Axis, AIG, Contessa, etc.is that the insurance claims made to them are too high. Due to high claims and resulting high costs, these insurance companies are not making enough profits. However, it may be hard to believe the given reason because if the claims would have been too high then insurance companies wouldn’t be making profits as they are doing.
Another probable reason for the exit of insurance companies from Irish markets could be the plans of the launch of an investigation by Competition and Consumer Protection Commission’s monopolies division to investigate the insurance sector, its practices, and other aspects to justify the insurance premiums and insurance market conditions for consumers.
Furthermore, since the UK has decided to exit the EU, the companies operating under EU passporting rules have withdrawn from Ireland’s insurance market. The small operators have decided to discontinue business in the insurance sector of Irish markets because seeking new authorization may be cumbersome and may cost high to them.
Besides these, there could be other reasons as well which have led insurance companies to exit Irish markets. The reason for the exit of even established companies may be any but the effects have to be borne countrywide by the people, business entrepreneurs, companies that were insured by these discontinuing insurance companies. Not only, it will be difficult to renew an expiring insurance policy by a business owner, business landlord or company in Ireland but also a high insurance premium cost will have to be paid for buying/renewing business insurance and business landlord insurance in Ireland. Although, the businesses and landlords who can afford to pay high premiums will undoubtedly get full coverage under the given business insurance Ireland policy or business landlord insurance policy as committed by the insurance provider who is continuing its operations in Ireland.