Mr. Éamonn R. Downey:

Absolutely. It is a first cousin of what they are doing. They do not set out with this deliberate intention. Our country needs insurance companies and they play a very important role. The IIF officials whom we met are very professional and it is a pleasure to meet them, but their agenda is different from ours, which is basically a St. Vincent de Paul agenda which has led to other matters.

What happens in practice with a traditional household insurance claim in Ireland is that the amount of the loss is agreed after a protracted period. Consider the case of Ms Seosaimhín Ní Bheaglaoich and others, perhaps known by members. The time element is considerable. When the damages are agreed – at €10,000, for example – one may receive a payment of €6,500 initially, with the balance to be paid when all the work is done and when VAT invoices are produced for it. This could be one, two or three months later. At that stage, eight or nine months might have elapsed.

My colleague, Mr. John O'Donoghue, will tell members about our experience in other countries, where the practice is known as claims fatigue. The companies wear one down. I refer to the first party under the policy, not to a third party in a motor claim; it is the company's own customer. The company slows down the claim and does not pay one in full, and only does so when the conditions I described are met. The claimant cannot afford this and becomes fed up of dealing with the company and also his own assessor. He may say, "Good luck to the lot of you," and take the €6,500, leaving €3,500 with the insurance company. The claimant, through his valuation, the loss adjuster and the assessor might have agreed on €10,000 as the cost of repair. The repair is done through the black market, by painting oneself, trying a bit of rewiring or not replacing a carpet for a year, two years or three years. We heard an amazing story about a cooker that dried out and was reused. The Society of St. Vincent de Paul had to buy a new one six months afterwards. What I describe is common practice among insurance companies. The attitude is reasonably common knowledge.

Insurance was always a very honourable profession. Insurance companies were careful about how they spent their money. When I began, there was small print but the companies improved. Society developed and we started to become more realistic. To achieve more profit, companies have changed their attitude and culture. The retention practice is not evident in Belfast or Bristol. If loss adjusters from Belfast are sent from my company, a national company, to a major flood in Galway, the circumstances I describe do not arise. We have a totally different approach. We negotiate, but on a professional basis. This was the way things were done in the past. Some bright spark has come up with the idea of trying retention in this State and the companies are getting away with it. This started with a figure of 10%.