Mr. Gary Dunne:

It is a pretty interesting debate. I think one of the key points to remember is that a lot of things happened in 2003 which led to a decrease in claims costs which then resulted in a decrease in premiums. Claims costs can refer to the average claim as well as the total number. In 2003, the Injuries Board was established which had a clear, visible impact. What the representatives of the board have said on costs is that the amount of money that the injured party received stayed the same but the legal element, when cases used to go through the courts, disappeared or was reduced to a fixed fee. Therefore, the amount that the insurers actually paid out was reduced. At the same time we had the introduction of penalty points and a major focus on road safety. This meant that the number of claims reduced. So, not only did the number of claims reduce, there was also a saving, at least in part, on each claim. There was also a large campaign conducted on fraud at around the same time. People became aware that it is not a zero-sum game and that insurance fraud is literally taking money from someone else's pocket. As a result, the amount of fraud reduced. A series of things happened that meant that claims costs, as a total, reduced which then led to premium reductions over that period. Actuaries would have been taking that into account in their pricing.

They would say, looking forward, costs are reducing, we accept that and recognise it and therefore the prices should reduce so that is why the prices have come down.