Insurance Costs: Michael Magner, Chair, IHF Insurance Committee

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1 Irish Hotels Federation Cost Savings Day Insurance Costs Presented by Michael Magner Chair, IHF Insurance Committee 3 rd October 2017

2 The Story so Far! Insurance Committee Areas of Activity Information Gathering Understand the Sector Research Legal Solutions Lobby Government Engage with the Market Achieve Insurance Reform Propose Solutions for Members

3 Gather Information from Members Survey Carried out in May 2017: 89% of Hotels Saw an increase in premiums Average increase reported is 35% Average premiums are working our at per guestroom 32% of premises saw an increase in the levels of excess over the last 12 months 75% of hotels had a claim again them in the last 12 months Average cost of settlement was 38,500 70% of hotels believe claims were exaggerated or unfounded 71% of Hotel (Slipping wet floor) 50% of Hotels (Tripping loose carpet) 45% of Hotels (Falling eg. Steps) 9% of Hotels (spillage/damage to personal property) *Based on a sample of hotels representing approx. 7,400 guestrooms

4 Lobbying Government The IHF has had a strong level of engagement with the Government, lobbying Ministers and officials in relation to insurance reform and the excessive cost of insurance in Ireland. We ve met with members of the Cost of Insurance Working Group within the Department of Finance as well as with Minister of State Michael D Arcy who chairs the group and his predecessor Minister Eoghan Murphy. Minister D Arcy addressed National Council in relation to insurance costs in July and is committed to addressing the concerns raised by the IHF. These include: the rising cost of insurance premiums and levels of excess the low number of insurance providers pursing leisure business the cost of administering insurance claims (e.g. expert witness costs) the claims culture in Ireland and increasing levels of exaggerated claims

5 Ongoing Lobbying of Government The IHF is carrying out research into the law around personal injury claims which will form the basis for a submission to the Government. This will include examining what works in other similar jurisdictions such as England, Wales and Northern Ireland. Our focus is on proposing legal solutions that offer a realistic prospects of change, particularly around the administration of claims. The proposals will be used to support additional lobbying activity at national and local levels, targeting policy-makers in Government, politicians and relevant State bodies. To date this has included political briefings, Government submissions (including in advance of the Budget) as well as media commentary.

6 Insurance Facility for Members The IHF is looking to establish an insurance facility for members and has met with a number of brokers to explore potential solutions. Our aims is to provide IHF members with access to a general insurance facility offering a broad range of cover at competitive premiums and excess levels. By supporting additional insurer interest in the sector, we aim to facilitate greater competition and choice for our members. Members qualifying for the scheme would be priced individually and the scheme would not involve a pooling of risk between members. The group scheme would be underpinned by a risk management / reduction solution, a code of best practice for hotels and a wider education resource on how to minimise exposure.

7 What have we learned so Far! Hotels and guesthouses are not generally of interest to insurers due to concerns around the high levels of employer and public liability claims and awards in the sector. The need for a high standard of validated risk management including, loss prevention and incident management is fundamental to making the sector more attractive to insurers. In addition to the core property damage, business interruption, employers liability and public liability insurances, members should consider the areas such as: Fraud/Crime, Cyber/Data Protection etc. and Employment Practice Liability. The major immediate added value to be brought to members is in relation to Risk Management without a validated good standard of risk management insurance availability and affordability will continue to be a serious challenge.

8 Next Steps! This is a long-term Challenge 1-3 year. We are considering the best way to progress with a members scheme. In advance, we re looking to help members engage with new processes around risk and claims management. We are awaiting results of our research and continue to Lobby Government. Please continue to send us examples of issues to assist with this process.

9 Thank You