Ms Verona Murphy:

My name is Verona Murphy. I am president of the Irish Road Haulage Association. The Irish Road Haulage Association, as Ireland's largest Government-recognised licensed road transport representative body, is committed to tackling the issues affecting its industry head on. It seeks to build the future of the Irish road transport industry by developing and promoting industry standards, facilitating road transport operator education and training, educating end-users and securing an equitable business environment. As the Irish Road Haulage Association sees the rising cost of motor, fleet, employer and public liability insurance, it should be noted that over the past year insurance premiums have increased across the board by between 50% and 100% and in many cases even more. The following is a cost comparison with trucks in other member states: in Ireland a truck on a motor policy costs an average of €5,000 per truck; in the UK it is €3,000; in Belgium €2,500; France €2,500; Portugal €2,400; Bulgaria €2,500; Germany €2,500; Poland €2,000 and Romania €2000.

We see several reasons for this increase. There is a uniform approach by all brokers and underwriters both of which blame the judicial awards in Irish courts and the book of quantum. The insured will pick up the tab for the Setanta debacle regardless of what the courts determine to be the case because neither the Government nor the insurance companies will absorb the cost, it will just be passed on to the consumer. The insured hauliers already operate in a very anti-competitive environment. Insurance companies are using high reserves to reduce claims bonuses and raise premiums. There is no competition in the market and those who are competitors are not competing, the insurance industry is very lax in fighting claims and there is a tendency to increase premiums as the preferred option. If there is no competition it is easier to hike the premium than fight the claim. The culture in Ireland is to claim as it is very easy to spend another person’s money.

There are several threats to the haulage sector. If an Irish haulier carries on operations it will become anti-competitive to the point of becoming a non-viable operation and go out of business. It can take the business abroad to another European country and set up an operation whereby it can obtain a new EU haulage licence and halve the insurance cost.

The foreign-registered Irish haulage operator is a loss of €250,000 per vehicle to the Exchequer and they are leaving in their droves. Northern Irish haulage operators accessing the market in Ireland already have a distinct competitive advantage as they can avail of the benefits of not having to pay the HGV levy in Ireland, while also having the scope to claim the diesel rebate in the South of the country. Such a competitive advantage is further enhanced as insurance premium increases are not being experienced to any similar degree as are being experienced in our indigenous haulage sector.

What follows are solutions to the problems and the way in which the Government can help. We ask the Government to make provision for road haulage operators to source their own insurance in a neighbouring member state. Can the Government change the operating field of the courts? For example, can they make a claimant accept compensation and encourage him or her not to go to court? On the issue of the claims culture in Ireland, can the Government fund a proper advertising campaign or even enact legislation that will result in imprisonment or fines for fraudulent claims and see that area policed? The collective road haulage industry must be permitted to access the European Single Market to ensure its fleet. There should be no difference in insuring trucks on continental territory, no matter where they are based, as long as they hold an EU registration plate.

Regarding the Government cap on reserves and the length of time reserves are being placed on incidents, insurers are using them to reduce claims bonuses and raise premiums. The Government must encourage new entrants into the insurance sector. There is no competition in the market. The insurance industry is very lax. Where there are enough competitors in what we see as a small market, they are not operating in a competitive fashion. We must discourage the practice of blocking the market and allowing only one broker to quote for one insurance company.

We ask the Government to support our IRHA-led initiative of the driver apprenticeship programme. We also ask for support for fleet and driver management. The Road Safety Authority's current approach is to pursue companies for road traffic offences as opposed to the drivers. The RSA feels that it cannot obtain a large enough financial fine from a driver and there are often repeat offenders appearing for different companies. It is the company that is fined and not the offender. We seek Government support for the IRHA HGV driver apprenticeship programme, which will commence in January 2017, with a view to counter-acting the critical driver shortage that is imminent. All insurance providers should be encouraged to support haulage operators and the apprentices participating in this programme as it will ultimately mean proper training and should reduce insurance risk.

There are haulage operators formally based in Ireland who have had no choice but to open a transport office in a more competitive member state. The Irish haulage companies that remain based in Ireland cannot continue to operate under the exorbitant costs associated with holding a fleet policy. This will result in operators reflagging to alternative, more competitive jurisdictions, which will obviously result in job losses. Urgent action and support from the Government must be undertaken in order to stem the loss of road haulage operators and subsequent job losses arising out of the current operating environment created by the rising cost of fleet insurance.

I myself put a scenario to insurance brokers at an open forum recently by asking the following question. This is very important. If a haulage operator was based in Ireland but was termed to be a continental haulier that is primarily carrying imports and exports to and from Ireland, thereby spending 90% of its time abroad and giving it a 10% chance of an accident in Ireland, on what basis could it blame the Irish Judiciary, the book of quantum or even the Personal Injuries Assessment Board, PIAB? They were also asked what they believe is the basis for the increase on haulage operators that have no claims experience on the island of Ireland. Neither of these questions were answered and they remain unanswered to date.

It is the opinion of the IRHA that the legislation that stops an Irish-registered vehicle from being insured by an out-of-State broker no longer fits the criteria of the European Single Market. In essence, if an operator's licence can be obtained by an Irish citizen anywhere in the EU, it should follow that an Irish operator can obtain his or her insurance in any country in the EU.

I thank members for the opportunity to present on this very important matter for the road haulage sector in Ireland. I would welcome any relevant questions.