Sport

Level of claims the big issue

May 22nd, 2017 10:10 AM

By Southern Star Team

Alex Sinclair, chief executive officer of Motorsport Ireland.

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Alex Sinclair, the CEO of Motorsport Ireland, tells Martin Walsh the real problems behind falling entries and increased insurance premiums for the sport

 

IRISH rallying is very much at the centre of discussion at the present time.  

Some feel it is at a crossroads and the next move will prove crucial to its long-term future. Its current plight – with costs spiralling and entries plummeting, has according to some people, placed not just events, but clubs, in jeopardy.  

So how has it all come to this from an era where the country boasted more than 50 World Rally cars, bulging entries and events almost every weekend?

The hike in the insurance levy seems to be the straw that broke the camel’s back. However, Irish rallying has become much more expensive in recent years.

Even before a competitor turns the steering wheel the outlay is significant, but the insurance levy seems a bridge too far.  

For instance, the entry fee for the recent Rally of the Lakes was €825 plus €375 insurance levy. For the ordinary ‘clubman’ competitor, it is easy to see how an event such as this could cost up to €5,000. Is there any other form of sport that costs the participants as much for just one event?  

Yet, Alex Sinclair, the chief executive of Motorsport Ireland remains optimistic.

‘We are surrounded by people that are so enthusiastic that nobody is going to throw in the towel here,’ he says, ‘whatever problems we face we just have to find solutions.  

‘They may be temporary and they may not be easy, but I know that everybody will row in for sure.  We have to be positive because you can end up talking yourself into a crisis and we don’t need to do that.’

While the sport may need a radical overhaul in terms of events, classes and other elements, the current predicament is an unrelated issue, according to Sinclair.  ‘We are in a position because within the last five years we have had a series of claims,’ he says. 

‘The awards being handed out by the courts in relation to claims generally are stuff that is really off the wall in terms of their relevance to what people have to live on.

‘The seriousness is in relation to the shortage of entries for stage rallies, which is well below where we want to be in terms of our budget for this year.  To give you an example, our budget was based on an average of 100 entries per event. At the moment we are not averaging 80, so that’s serious.’

On the various shortfalls, he said that organising clubs need an entry of 80 to 90 crews in order that they can pay the bills. 

‘That is the most pressing immediate problem.  From that point of view it is crucial that we keep the calendar intact.’  

As for the shortfall in terms of income from the insurance levy: ‘That will have to be made up from whatever reserves we have here.’ When asked was there a bottom to the MI reserves, the CEO quipped, ‘There’s certainly is, I can’t tell you what it is as we are trying to negotiate with people, but its not big that’s for sure.  We will get though this year, absolutely, next year would be a struggle if the same thing occurred, we are as fine as that.’

Asked to comment on speculation that the insurance levy shortfall could cost the governing body as much as €250,000 this year, Sinclair said, ‘I hope it will not be as bad as that, that is all I will say. It might be. I don’t know what people are going to do in the latter part of the year, but I’m hopeful that things will pick up now and we won’t face that.  At the moment we are looking at the guts of €125,000.’

It was only last January that Motorsport Ireland finally secured insurance cover after all its affiliated clubs backed the only real proposal on the table. 

Sinclair also revealed that at the moment, claims since 2012 within their system are totalling around €8m. ‘Insurance companies make no secret of the fact that they are in it to make money. If they cannot assess the risk because of the awards system - as was described before as a “Wild West scenario” – then they are not interested in taking on that risk.  

‘They take on risks when they can assess what the exposure is likely to be, they can’t come to any conclusion in the Irish market.’

On the question of a crisis, he said, ‘We are not in crisis because we have a little bit of breathing space, we have a deal in place for this year. Let’s get as many competitors out competing to help the clubs as much as we possibly can.  Those people (competitors) are still there, they have their cars and I’m hopeful that they will want to do an event before the year is out.’

The CEO is also appealing to clubs to contact their local TDs to highlight the present situation.  

‘The level of awards within the Irish court system is totally out of kilter with the rest of Europe, it must be adjusted correctly,’ he said.  

‘The Personal Injuries Assessment Board (PIAB) is being by-passed, it must be given the teeth that it was intended to have when it was originally set-up in 2004.  I would urge clubs to contact their political representatives in his regard.’

Rallying generates huge finance to the tourism and associated sectors.  From a local context, the West Cork Rally is seen as the curtain-raiser to the local tourism season while the Fastnet Rally is one of the final events in the region and generates bed nights in Bantry and surrounding areas that normally would be relatively empty at that time of year.  

The Donegal International Rally is estimated to be worth €25m to the economy of the north-west.  

So how much is the sport worth to the Irish economy? Sinclair stated that the findings of their last survey were ‘all over the place’, so an exact figure is not available presently. However, he revealed that MI are currently conducting a new survey via their affiliated clubs through a series of around ten questions so that, finally, a real value can be put on the sport.

No matter what, Sinclair added that there is no government funding available to pay the insurance premium. ‘It can’t be justified,’ he said.

In next week’s Southern Star we will reveal the views of the four Motorsport Ireland affiliated clubs within County Cork. In addition we will look at aspects of the sport where change could be implemented and the possibility (akin to GAA circles) of the amalgamation of some clubs on a rotational basis. 

Meanwhile,, a survey undertaken last year reveals that more than 65 percent of Motorsport Ireland rally licence holders only compete in one rally per year – that in itself tells its own story.  

Crossroads – left or right or straight on? 

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