Edward Timmins (Wicklow, Fine Gael)

We are kidding ourselves if we think the insurance companies are going to find some generosity. They want to maximise their profits with their shareholders. That is a non-runner. We could examine their overheads and see that they are paying themselves massive salaries, paying out big dividends and so on, but that is not going to get us anywhere. Competition is the challenge and the problem. Within the EU the problem is that we are supposed to live in a free market and an open market, but we do not. I recently read that in services within EU countries there is effectively either a 110% or 140% - let us say 110% - equivalent of a tariff because of the barriers to entry between different countries. Unfortunately, we do not live in a free Europe. When it comes to trading in goods, there is effectively a tariff of approximately 40% in real terms. When it comes to trading in services, it is estimated that because of all the barriers, the equivalent of a tariff of over 100% is being faced. That is the problem. It is a deep wide problem within Europe. If we try to solve to that, it will certainly help the Alliance for Insurance Reform. There is no question about that.

I do not understand the barriers. Deputy Brennan asked the witnesses about the barriers. Perhaps we could look separately at the barriers to entry for other insurance companies throughout Europe and the UK, our nearest neighbour that uses the same language, to find out what those barriers are. Clearly, competition is the only way the cost will be driven down. We will not be expecting any goodwill from the insurance companies. The Government can do so much to put manners on them, but it is not going to drive down their profits. They want to keep their high profits. They will charge what they can get away with. That is the way businesses work. I am sure some of the alliance's members think the same way.

I wish to focus on one thing from my own experience of working for small businesses for most of my life. Every year, we dread what the insurance company fee going to be because it is the unpredictable figure that lands on our desk. We do not know what it is going to be and we often get a shock. We ask how we are going to mitigate it, and whether we need to increase our excesses to pull it down. That is the real world and what businesses are faced with. I wish to focus on brokers.

Brokers come in and they are meant to represent the companies to get the customer the best deal with the insurance companies. However, the broker is often operating on the basis of a percentage of the premium. Therefore, they actually gain if the premium goes up. I tried this in a company I worked for. Have any members of the Alliance for Insurance Reform tried saying to the brokers "I'll give you X amount of a fee or a higher percentage fee if you get my premium to reduce"? The brokers are in a slightly contradictory position that the higher the premium, the better their income is.