Katherine Zappone (Dublin South West, Independent) | Oireachtas source

The cost of insurance for the childcare sector has come into focus in the past few weeks. This has arisen following the withdrawal of an insurance provider from the Irish market and the confirmation that another could not be found. This is undoubtedly causing distress to providers and worry to parents.

I acknowledge there are many providers who are facing increased insurance costs. Until recently, there were two insurance underwriters offering insurance to the childcare sector in Ireland. On 6 December, one of these, Ironshore, notified its 1,300 clients that it would be withdrawing from the market. On 17 December, Padraic Smith and Company Limited, the broker which had provided the Ironshore underwriting services, informed its customers that it had failed to get a new underwriter to take over its client base. This leaves only one underwriter currently offering insurance to the sector, namely, Allianz.

The Government is limited in what it can do in this situation. It cannot compel a private business to remain in the market and it cannot directly intervene in the pricing of insurance offered to childcare providers. However, officials in my Department are working hard to find a way to support those services that have been impacted. We have engaged with Allianz, which I understand has confirmed that it will offer quotes to all but the most high risk services. Allianz, through the broker Arachas, is willing to consider quotes for all affected services. Quotes are being processed within 24 hours in the majority of cases. Some 1,100 quotes had been issued by midday today to previous Ironshore clients.

This leaves 200 providers who have not yet received quotes. I will receive an update on this tomorrow, which will be made available.

There may be a very small number of very high-risk services that will not receive quotations. The press has reported that some providers are reporting significant increases in premiums. I understand that the premiums charged by Ironshore were considerably lower than the market average, which is leading to the increases. I also understand that the average cost of Allianz insurance for full-time childcare is €60 per year per child. The average cost for sessional services, such as the early childhood care and education, ECCE, programme is €25 per year per child. This equates to 0.5% to 0.75% of the turnover of a service.

I understand that the increase is causing difficulties for providers. My Department and the city and county childcare committees are offering a number of supports for providers, including a case management system for services experiencing sustainability difficulties. For community providers, who are one in four of all childcare providers, financial supports can be made available after an assessment through a process managed by the childcare committees and Pobal. I would encourage services to contact their local childcare committee to access a range of supports, including advice or business planning.

With regard to the issue of insurance, I am 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 in the sector. Consequently, we need to make the market more attractive to both existing insurers and to new entrants to increase competition, which in turn should lead to a reduction in pricing and an increase in capacity. For the childcare sector, this includes compliance with regulations. Compliance helps to manage risk. Managing risk is important for children and should also make childcare facilities safer places. I agree with the CEO of Tusla when he says that the childcare sector is largely compliant.

I am glad that I am in a position to make a once-off payment averaging €1,500 to providers to reflect their commitment, especially in a difficult year. This is under the programme support payment I established in 2017 to recognise the administrative burden on providers. This support will come from existing resources available to me in 2019 , and payments will be made by 28 December. The range of payments will be from small amounts right up to €26,000 for the very large providers, depending on the number of children being cared for. It is a fast-moving situation but I am committed to supporting the sector appropriately, and above all to protecting children.

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