Insurance premiums have started to fall and are likely to decrease further amid a clampdown on claims fraud, lower damages awards and moves towards the establishment of a personal injuries assessment board, an Oireachtas committee has been told.

Two major insurers, Allianz and Quinn-direct, said they had cut premiums this year, passing on to customers the benefits of a reduction in the levels of claims.

Allianz told the Joint Committee on Enterprise and Small Business yesterday that its private motor premiums had fallen 8 per cent in the 12 months to November, to an average of €833 from €905; employers' liability by 4.9 per cent to an average of €24,417 from €25,665; and public liability insurance by 6.7 per cent to €4,346 from €4,658.

Chief executive Mr Brendan Murphy said Allianz, a division of the German insurance group, would reduce motor premiums across the board by a further 7.5 per cent on January 1st, reflecting declining claims costs. Quinn-direct said that in the year to date it had cut motor rates by 19 per cent on average, commercial liability rates by 22 per cent and commercial property rates by 20 per cent.

This means that annual motor premiums are around €200 less on average in week 43 of 2003 than for the same period a year earlier.

The two insurers differed over the extent to which reforms of the insurance sector - particularly the advent of a personal injuries assessment board - would influence premiums.

A target of a 35 per cent premiums reduction set by the enterprise committee is achievable, thought it is difficult to predict how long this will take, according to Mr Kevin Lunney, Quinn-direct general manager.

But Allianz declined to say by how much premiums might fall; Mr Murphy was reluctant to make such a forecast, citing a lack of proper data.

Proposals by the committee to increase the awards limits of lower courts and to give policyholders the power to refer claims settlements to an arbitrator are unlikely to result in lower premiums and could merely add extra layers red tape to the insurance system, Mr Lunney said.

Responding to suggestions that insurers should "recompense" customers charged crippling business liability premiums over recent years, Mr Michael Kemp, Irish Insurance Federation chief executive said the industry had lost €180 million on liability insurance in the five years to 2002.