Zurich Municipal is doubling down on its pre-Budget appeal concerning the much-talked-about Insurance Premium Tax (IPT).
Earlier this month the Zurich unit pointed to the impact of IPT increases on charities and public sector organisations in the UK – citing its study which found that nearly a quarter of them no longer cover or have reduced cover on some risks because of the levy. Now the insurer says nine in 10 of those polled from the public and voluntary sector would suffer a negative financial impact if IPT is raised further.
The survey also showed that 43% believe that a new hike would affect their organisation’s ability to adequately insure itself against all perils.
Respondents include local authorities, schools, social housing, and charities.
Meanwhile in the event that IPT reaches the same level as VAT, or 20%, nearly half (46%) of the poll participants would be forced to reduce or cancel cover on certain risks. Zurich Municipal said such an IPT rate would see two in five cutting budgets elsewhere to retain sufficient insurance cover.
“We are urging the government to stop any further increases to the Insurance Premium Tax for the public and charity sectors,” stated Zurich Municipal managing director Andrew Jepp. “To them, any further rises to IPT equal financial penalty for doing the right thing and protecting themselves against the unique risks they face.”
Jepp said the “unintended consequences” of IPT will only mean an increased level of vulnerability to larger financial losses.