Leading US, South African and British insurance companies are looking to enter the Republic's market, The Irish Times learned last night. Barry O'Halloran reports.
The Irish Financial Services Regulation Authority (IFSRA) has recently licensed London-listed Brit Insurance, the UK's second-largest quoted general insurer behind Royal and Sun Alliance, to operate in the Irish market. The company last year had a premium income of €1.5 billion, and technical profits of €150 million.
It is understood that three more players, South African-based Santam, and two US-basedcompanies - Great American Insurance and Quanta Capital - have applied to IFSRA for authorisation to trade here. Santam is one of the largest general insurers in South Africa. Last year, it had a premium income of €1.26 billion and a surplus of €70 million.
Great American is a subsidiary of Cincinnati, Ohio-based American Financial Group (AFG). It specialises in commercial and property insurance. Last year AFG had sales of €2.7 billion and profits of €237 million, of which €126 million came from insurance.
Quanta Capital is a Bermuda-based, Nasdaq-listed company incorporated in May of last year. It focuses on speciality insurance and re-insurance. The company took a listing in early 2004 after making a loss of €12 million in its first seven months of trading.
The Tánaiste, Ms Harney, told The Irish Times last night that she believed that the impact of market reforms and increased competition could drive the cost of insurance cover down a further 10 per cent by the end of the year.
Ms Harney was speaking from London after meeting almost 100 representatives of 33 individual British insurance companies. She was giving them details of changes in the Irish market, such as the introduction of Personal Injuries Assessment Board (PIAB) and the Civil Liability and Courts Bill proposed by the Minister for Justice, Mr McDowell.
That legislation imposes stiff penalties for fraudulent and exaggerated personal injury claims and streamlines the procedures involved in getting to court.
The PIAB began dealing with employers' liability cases on June 1st. It provides an informal system for settling claims where liability is not disputed. It will begin dealing with motor and public liability insurance shortly.
"There was a lot of interest in the reforms we have introduced," she said. "A lot of people wanted to know what we had done."
The Tánaiste was visiting the British capital to meet the insurers in an effort to draw more companies into the Irish market. "Even one new player in the Irish market could have a dramatic effect. Motor is already down 22 per cent over the last year and brokers are saying that employers' liability is down as much as 25 per cent.
"The reforms are only just taking effect and I think we can drive those prices down by at least 10 per cent more by the end of the year," she argued.
At the same time, the industry has returned to profitability after a period of losses that fuelled increases of up to 300 per cent in premiums. Figures produced recently by the Irish Insurance Federation (IIF) show that the 20 non-life insurers operating in the State had combined profits of €747 million in 2003.
Ms Harney argued last night that their profitability should have the effect of boosting competition as it made this country attractive to new entrants.
