Companies face mid-term insurance premium reviews as the industry struggles to stem underwriting losses. The Irish Brokers Association (IBA) has warned that some of the larger insurance companies are putting a clause in commercial contracts at the moment, giving themselves the freedom to come back and ask for more money from their clients.

"They are reserving the right to review the premium mid-term. This is unprecedented," said Mr Stuart Reid of the IBA.

Mr Reid claimed the situation in the commercial insurance market was much worse even than the Irish Insurance Federation (IIF) suggested earlier this week. In response to the federation's prediction that liability and commercial property insurance premiums would increase by up to 50 per cent in the coming months, the IBA said there were elements of the market that were unable to get a quote at all.

"These people are going out of business because they can't self insure, they're too small," Mr Reid said.

The IBA spokesman said that increases in the order of 50 per cent were now the norm and that many clients were facing premium hikes of 100 per cent or more. He said liability insurance for businesses such as restaurants and sole tradesmen was becoming almost impossible to find. "This is as a direct result of insurers' appalling results in the last two years," he said.

The IBA says the massive increase in premiums reflects the fact that the Irish insurance market was very soft during the 1990s. "Insurance companies were taking a lot of risks and cutting premiums to get business. They were able to do this because of the cushion of strong investment returns but the situation has now come full circle," Mr Reid said.

Insurers are facing sharp increases in their reinsurance treaties in January, which will be passed on to clients. Reinsurance costs, which account for 15 to 20 per cent of premiums in liability and property insurance, are expected to double or even treble, according to the IIF.

The IBA anticipates the market will recover within the next 12 months. In the meantime, it is urging members to search the market for quotations for their clients.