Oireachtas Joint and Select Committees
Wednesday, 18 December 2019
Joint Oireachtas Committee on Children and Youth Affairs
Insurance Cover for Crèches: Discussion
Yes, 30%. I understand that the other providers that were insured through Ironshore Europe will face increased in the region of 100%. We have all received representations that some people are getting quoted more than that. In general, the latter is the information we have been given. That is extremely unfortunate. The information we have is that the issue arises because the policies they had previously been on are not considered to be sustainable and that no insurer can take on a loss-making premium. Just a few hours ago, I was informed that Allianz has quoted for the 1,015 providers of those who were with Ironshore Europe and is working to offer quotations to virtually all of the other providers.
I want to make this a little more concrete and then I will address those larger percentage increases. We must look at the overall context. The policies now being offered through the ECI scheme will, for example, typically cost providers between 0.5% and 0.75% of their total turnover. I will give an example of a crèche with 40 children. If it pays insurance of €60 per child per year, an insurance premium would be in the region of €2,520. This example is a provider which may not have paid that much before. If the provider charges an average fee of €800 per month per child it gives the provider a turnover of €384,000, of which the insurance premium represents just 0.65%. This compares favourably with other sectors. These numbers demonstrate that the average of the standing insurer is a certain and relatively small percentage of overall turnover. This is the way the insurance industry operates. I was also quoted an example of one larger provider, which caters for 800 children, whose premium has risen significantly from €20,000 to €32,000. Even in this case, however, the cost per child insured has risen from €25 per year to €40 per year. While this is a significant rise, at 0.26% to 0.4% it is still a small proportion of the provider's turnover. Having said all of this and while it is important to put it on the record, this is what is happening across the sector. Clearly, there are cases where the increases are substantially more. We know this and we hear this.