Mart insurance: Cost of claims ‘seriously out of kilter’

Mart insurance premiums are skyrocketing due to a serious imbalance in claims pay-outs, according to co-ops representative Ray Doyle.

Doyle, who is the livestock services executive at the Irish Co-operatives Organisation Society (ICOS), was speaking on the matter alongside general manager of Donegal Co-op Livestock Mart Eimear McGuinness with presenter Claire McCormack on tonight’s episode of FarmLand.

The livestock executive said: “The costs of insurance are simply being passed onto the marts because of the costs of claims.

“You have numerous issues and parameters that are leading into this; the costs of claims in Ireland are seriously out of kilter with the rest of Europe and most definitely across the water with England.

“For example, a typical injury in marts is maybe a broken leg or a broken arm.

A broken leg in England will yield probably about £6,000 to someone who’s had that accident. In Ireland here it’s indefinite; that same injury could cost four or five times that.

“And that is ultimately the issue – when it gets into the judicial system and the system of the claim, the level of claims in Ireland is extremely high compared to our neighbours.”

Doyle said that, ultimately, the problem is that the claims are too high once they get to the system. However, there are other issues also to contend with.

Livestock mixing

“The problem from the marts’ point of view is we’re getting it increasingly difficult to defend livestock mixing in a completely ad-hoc way with members of the public.

“And when you go to court with that particular situation and you have livestock mixing with no regard to health and safety with the injured party the judges have no concept of a mart; they’ve no concept of agriculture; and they simply look at it as you are negligent by allowing animals to simply mix with the people. It’s multifaceted, this problem.”

Doyle said that measures have been put in place following recent mart accidents to reduce risks.

We have to reduce the risk of the accident happening because what’s out of our hands is the actual awards.

“The Alliance for Insurance Reform has done a lot of good work and we have met Minister Darcy ourselves to see can we get the level of awards dropped or to some way more sustainable levels – because if the awards drop, our ultimate premiums drop.”

‘Marts can’t afford it’

McGuinness explained just how much insurance premiums are rising in recent years, following research she conducted of marts between 2015 and 2018.

General manager of Donegal Co-op Livestock Mart Eimear McGuinness

She explained: “Marts can’t afford it; it’s just skyrocketing.

I know with our own insurance, we went from €7,000 and we’re now at I think it’s €13,000.

“Other marts have moved from €7,000 – everybody would have been at that range. We all would have been around that – and some have gone up to €22,000. Another mart [manager] was telling me he was at €14,000; now he’s asked for €28,000 – he has no claims history. It’s just marts can’t afford it.

“The insurance companies have a tendency to settle claims because it’s more cost-effective and, while we understand that, at the end of the day the marts are going to pay for that.”