independent

Sunday 19 January 2020

Insurance costs are a cause for concern for local crèches

Laura Farrell of Bright Beginnings
Laura Farrell of Bright Beginnings

Pádraig Byrne

Cerche and childcare providers across Co Wexford have said that they are coming under increased financial pressure following the news that one of the two insurance companies covering the sector has pulled out of the Irish market. Some childcare providers have said they've seen their premium quotes treble and feel as though they are being 'held over a barrel' as they face a monopoly in the Irish Insurance market.

While both Minister of State for Financial Services and Insurance Michael D'Arcy and An Taoiseach Leo Varadkar both said that the government could not intervene, Minister Katherine Zappone announced on Wednesday evening that 'a once-off support payment' for childcare providers this week in recognition of 'the additional administration costs' the services have faced this year. The payment will work out on average at €1,500 per provider and will be made before the end of the year.

Childcare operators are struggling to get cover at reasonable prices after P Smyth Insurance Brokers confirmed they were withdrawing their services. The reason given was that the underwriters have pulled out of the market and a replacement couldn't be sourced despite numerous attempts. The operators were advised to contact Arachas Corporate Insurance Brokers 'immediately' to establish if they would be in a position to take them on as a client of their brokerage, and place you in a risk programme which they have access to with Allianz Insurance Ireland.

One childcare operator facing a major increase in their insurance premiums is Bright Beginnings, which runs a crèche, pre-school and after school service for over 200 children in both Oylegate and Castlebridge, as well as an after school service in Ballycanew, and employs over 40 staff. Having received a quote from Arachas on Wednesday, they have found that their premiums have doubled on last year.

Somewhat bizarrely, Arachas are also said to be affiliated with Early Childhood Ireland and are offering discounts for members. While last year the cost of insurance for the Oylegate pre-school was in the region of €2,800, the quote given by Arachas was €5,655 with Early Childhood Ireland membership and €7,330 without. 'Unfortunately, we're left with very little choice here,' Bright Beginnings proprietor Laura Farrell said. 'It's either pay it or we can't open the doors in January.'

'We feel once again that the Early years sector is being unfairly treated. This is a huge cost to small businesses and will have to recouped somehow in order to sustain our business. The only way we can see of doing this is passing the cost on to parents.'

Ms Farrell pointed out that the cost of childcare in Ireland is way above the European average and blames this on the government's failure to 'recognise the importance of Early Years Education and Care'.

Minister of State for Financial Services and Insurance Michael D'Arcy was somewhat dismissive of the plight of childcare providers, but described the situation as 'not ideal'.

He pointed out that while Arachas was the broker left in the market, Allianz were the insurers and according to the minister, they 'already insure two thirds of the market' when it comes to crèches and pre-schools.

When the figures quoted to Bright Beginnings were presented to Minister D'Arcy as an example, he replied: 'That increase shouldn't be enough to close a business. I'm not being glib, but there are several sectors who are in exactly the same situation.'

'This situation was brought about because companies came into Ireland to underwrite a sector and undercut all the existing companies. After a while, they realise that it's not profitable or sustainable and they pull out. It needs to be profitable for these companies to offer cover.'

Minister D'Arcy said the Government has put in place a structure to try and reform the insurance sector as a whole and what has happened within childcare is a specific problem within the sector.

In a letter circulated to parents, Ms Farrell called on those whose children attend Bright Beginnings to lobby their TDs in a bid to ensure the government steps in and acts to secure early years education and childcare.

'Our sector has taken a hammering by the media and our government in relation to bad practice in a minority of services, and we have had enough,' Ms Farrell said. 'Our Government needs to see the detrimental effect this could have in the long term for families, Early Years staff and our business. We need to get the message out.'

While the establishment of an emergency fund was called for by childcare providers, Minister D'Arcy said that this would not be happening. However, a few hours later, Minister Zappone announced the €7 million in funding being opened up nationally, but it was stated that this was to help providers with 'additional administration cost' as opposed to be specifically aimed at helping with increasing insurance premiums. When asked about a fund being opened up to help with spiralling insurance costs, Minister D'Arcy said:

'That won't happen. It can't be done. If there was nobody left to quote the sector it would have to be looked at, but there is an option there. Obviously I'm not pleased with the situation, but it's no different to the one that several sectors find themselves in at the moment.'

Wexford People

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