Mr. Peter Boland:

It is a very worthwhile exercise to have a look at the two main sectors impacted by the reductions in personal injury awards, which is the private motor sector on one side and the liability sector on the other. The circumstances which have driven private motor insurance down by an average of 9%, a figure that is accelerating according to CSO figures and is at minus 12% here to date, are exactly the same circumstances that apply to the liability insurance market. Insurance is calculated on future risk. The future risk applicable to both sectors has dropped because of the judicial guidelines, the establishment of the Garda insurance fraud co-ordination office and the perjury Act. Moreover, much other activity is slated on the horizon. It is moving too slowly but it is coming.

What we have on the motor side appears to be a decent level of competition and because of that competition, the benefits are being passed on to consumers. While it is fair to say that there are quite a few underwriters underwriting liability insurance, when one drills down to individual sectors or sub-sectors, typically policyholders are left with only one underwriter. That is not healthy competition. In many cases, accidental monopolies are being created where only one underwriter is prepared to offer cover. Typically what our members find is that when they get to that situation the cost of the policy rockets and when they query the cost they are told that is just the market. It has nothing to do with risk and everything to do with a lack of competition.