One-off payment for creches to help with rising insurance costs
Up to 1,000 units across the country could see a 100% increase in their premiums after Ironshore Europe quit the Irish market.
The Children’s Minister has approved a one-off extra payment of 1,500 euro to childcare providers who are facing rising insurance costs.
Up to 1,000 creches across the country could see a 100% increase in their insurance premiums after Ironshore Europe quit the Irish market earlier this month.
It leaves only one firm offering insurance to creches and childcare facilities, meaning all providers will see a hike in premiums.
Katherine Zappone told the Oireachtas Children’s Committee that around 1,000 providers who were insured through Ironshore will face rises in the region of 100%.
About 2,600 Allianz customers will face increases of about 10% next year, while 400 providers will see an increase of around 30%.
— Katherine Zappone (@KZapponeTD) December 18, 2019
In recognition of a difficult year for #childcare providers I have approved a once-off Programme Support Payment which will be made in the coming days averaging €1,500 per provider @DCYAPress @EarlyChildhdIRL
In an emergency Oireachtas meeting, Ms Zappone said the additional payments will be made by December 28.
“It is undoubtedly causing distress to providers and great worry to parents, and I acknowledge that there are many providers who are facing increased insurance costs,” she said.
On December 6 Ironshore told its 1,300 clients it would be withdrawing from the market.
No new underwriter has joined the market to take over Ironshore’s clients.
Ms Zappone said the Government is “limited in what it can do”, adding that it cannot compel a private business to remain in the market.
“However, officials in my department are working hard to find a way to support those services that have been impacted,” she added.
“We’ve engaged with Allianz, whom I understand have confirmed that they will offer quotes to all but the most high risk services.
“Some 1,100 quotes have been issued by midday today to previous Ironshore clients. This leaves 200 providers who have not yet received quotes.
“There may be a very small number of very high risk services which will not receive quotations.
“With regard to the issue of insurance, I’m liaising with my colleague, the Minister for Finance, to consider a review of insurance in the childcare sector as part of the ongoing independent review of costs that I’m doing in the sector.
“Consequently, we need to make the market more attractive to both existing insurers and to new entrants in order to increase competition which in turn should lead to a reduction of pricing in an increase in capacity.”
Labour’s Sean Sherlock said he had been contacted by childcare providers whose risk profile has not changed, but have been told their insurance costs are increasing six-fold.
Mr Sherlock added: “What you’re saying, and I say this respectfully, doesn’t give those providers any comfort.”
Sinn Fein’s Kathleen Funchion said she was concerned that the support programme would not help everyone.
She added: “There is total panic this week and I just feel like it always seems to land on the shoulders of the workers and the providers.
“For some of those people 1,500 euro will be a help but for some of the them it won’t.”
Fianna Fail’s Robert Troy said that where there is a monopoly, there is an opportunity to overcharge.
He called for the minister to help bring in the necessary reforms and incentivise more firms into the market.
“While the announcement you made today is welcome, it’s a sticking plaster if we don’t actually address this and bring insurance premiums down,” he added.
“We shouldn’t have to use tax resources to supplement the insurance industry and that’s what’s happening now.”