THE benign influence of competition, which has made financial services more customer friendly, may now do the same for motor in SC. Guardian PMPA Insurance, the country's largest general insurer, which insures four out of every 10 drivers on Irish roads, said this week that it plans to reduce Fits motor insurance premiums by between 14 and 10 per cent.

Premier Direct Insurance, the Bank of Ireland's motor insurance arm, was quick to respond, cutting its rates by up to 14 per cent. Other insurers are expected to follow suit.

Last year, group operating profit at Guardian PMPA rose £10.4 million to £51.4 million, due to greater profitability from motor insurance. Chief executive Gerard Healy says rates could fall further if court awards are reduced and road safety, and drink driving campaigns intensified.

Buoyant global stock and bond markets boosted investment income, with the group realising £37 million of gains, leaving £50 million of paper gains on the books.

While Guardian remains a minor player in the life market, Healy says the group would like to step up its involvement, possibly by acquisition, if a suitable opportunity is identified.