The reasons given by the industry for these increases include increased claims costs and worsening claims experience to the point where insurers are making underwriting losses and there is increasing difficulty in reinsuring business. It might also be due to the contraction in the number of insurers active in certain sections of the market together with increasing property which allows prices to drift upwards. We have an advanced economy. Wages are higher, new vehicles are being purchased and property is more valuable. These factors have led to increased costs.
The Government is taking initiatives to deal with the situation. It will proceed with the personal injuries assessment board. It is awaiting the outcome of the motor insurance advisory board report and will respond to its recommendations as quickly as possible. It would not be possible to have retrospection pertaining to the new authority. A new structure must be put in position. It will be given a wide remit, strong powers and a very high-powered staff. We are confident that when it comes into operation, with the new initiatives that Government will take pertaining to insurance, it will have an effect on the cost of insurance over a medium period.