Councillors hit out at ’cartel’ insurance firm over 10% hike

Councillors hit out at ‘cartel’ insurance firm over 10% hike


Anna-Marie Flynn

THE insurance company covering all local authorities in Ireland has been branded reminiscent of a ‘cosy cartel’ by a Mayo councillor.
The statement issued by Progressive Democrat, Cllr Tommy Cooke, came after a presentation by Enda Brazel, Liability Underwriting Manager, with Irish Public Bodies (IPB) Mutual Insurances Ltd, at last week’s meeting of Ballina Town Council, during which Mr Brazel confirmed that IPB is the sole insurer of every town, city and county council in Ireland, as well as the HSE and VEC organisations nationwide.
After a request that a representative from the company expand on its ten per cent premium hike for 2009, Cllr Cooke told Mr Brazel: “This reminds me of a cosy cartel. We cannot get the best if there is no competition. We had to take a minus one  per cent rate change in order to try and help our rate-payers this year and yet we find a ten per cent increase in our insurance. There is nothing stopping you coming back here next year with a 20 per cent increase.”
Mr Brazel refuted the allegations, stating: “It is not the case that we are a cartel. I think we deliver value.”
Attributing the premium increase, with the new total of over €300,000, to ‘an unprecedented global meltdown’, he said the company is a ‘mutually specific set-up for the benefit of its members’. “2008 was the worst year for everything in the world. We have been forced to increase our premium, but this is on the back of decreases of 25 per cent since 2005,” he said, although admitted he was unable to provide figures to support earlier decreases.
Outlining the company’s profits for last year, which fell in the region of €76 million, Cllr Mark Winters referred to IPB as a ‘monopoly’ and questioned why the rate-payers of Ballina are footing a bill for a premium hike when he claimed IPB continues to make money. Mr Brazel responded by stating the figure represented capital to keep in line with solvency regulations. He described the profit figure as ‘a prudent way to continue to write the business’.
Cllr Mary Kelly called on officials to reduce the public liability cover to the region of €4 million, down from the current standing €9.6 million after Town Clerk Carmel Murphy confirmed the largest claim for 2007 was approximately €140,000.
Mr Brazel said the minimum level recommended ten years ago was €6.5 million with the majority of local authorities now opting for a recommended €9.6 million and said the Council should choose ‘what it feels comfortable with if there is a major issue’.
The representative said he was unable to furnish councillors with any figures specific to Ballina regarding claims or premiums.
While the majority of elected members expressed dissatisfaction with the lack of information provided by Mr Brazel, Cllr Frances McAndrew took a different stand and said she was ‘embarrassed at the inquisition’ the company’s manager was put through. “I accept the logic of what you are saying and have no problem with it,” she said. 
Town Manager Paddy Mahon said the presentation was very necessary, stating: “The members have issued legitimate concerns as representatives of our rate-payers and that is important. We have been a very good customer of IPB and hopefully next year we will see a reduction in the premium for 2010.”
He said he would look into the past history to outline reductions, if any, in previous years and asked that the members give him an opportunity to furnish them with such information.