The insurance crisis has heightened due to one of the largest and last insurance firms offering coverage for the leisure sector pulled out of the market. The firm pulling out of the market presents a risk for the stability many jobs.
The insurer was based in the UK, referred to as LeisureInsure and is said that it will not accept quotes for new businesses as of this week. Furthermore, LeisureInsure has noted that by the end July, it will also stop all renewals.
LeisureInsure was one of the few remaining insurers that offered coverage for unique businesses such as soccer teachers, drama classes, event companies, bouncy castle operators, leisure center, yoga classes and even some play centers.
The insurance company was based in Oxford, UK and was a management agent for the insurer AXA XL. AXA XL is a subsidiary of a global insurance company AXA. LeisureInsure dealt with insurance brokers and policyholders.
According to the Alliance for Insurance Reform, thousands of businesses will no longer be able to receive insurance coverage. The withdrawal of LeisureInsure will ultimately effect play center and adventure centers.
The number of jobs at risk is high. It has been estimated that around 4,500 jobs are now at risk due to the withdrawal of the leisure insurer. However, some cover is being provided to the leisure sector by brokers with access to a special division of Allianz.
LeisureInsure pulling out of the market also effects the small businesses using AXA XL coverage. Viable businesses are now being closed because of the insurers’ decisions.
The head of the Irish Inflatable Hirer’s Federation noted that around 220 members of the organization were insured through LeisureInsure and are now unable to receive coverage.
LeisureInsure pulled out of the Irish leisure sector because of the Irish compensation system, ultimately making it unaffordable as a UK insurer to operate in Ireland. The UK insurance company was also influenced by the likelihood of a crash-out Brexit.
The risks associated with the recent events of LeisureInsure pulling out of the market is that many firms will go out of business or some will carry on with out insurance. Ultimately, the lack of leisure insurance has led to a major gap in the market.
According to the leading insurance broker of first Ireland, around 10 British insurers have pulled out of the market the last three years and the trend is only continuing. Overall, this trend poses the biggest threat to small businesses in the leisure sector.