Insurance premiums are set to fall if the new penalty points system for drivers continues to reduce motor accidents, the chairman of one of the Republic's major insurance players predicted yesterday.

Premiums could be reduced further if the Government presses ahead with plans for a personal injuries assessment board, Mr Michael Berkery, of FBD Insurance, added.

FBD reported a 24.3 per cent increase in operating profits to €37.5 million last year, the group's a.g.m. heard yesterday.

Turnover climbed 23.1 per cent to €422 million and the value of gross premiums written rose 31.4 per cent to €326 million. A steep decline in claims pushed underwriting losses to €10.2 million from €22.3 million for 2001.

Mr Berkery used the meeting to renew calls on the Government to establish the personal injuries assessment board, claiming it would lower the cost of payouts and reduce premiums.

"While there has been some greater realism in recent personal injuries awards by the judiciary, the insurance industry is awaiting the impact of the personal injuries assessment board on reducing the overall cost of claims. To this end the establishment of the \ on a statutory basis is a priority for the industry," he said.

With the number of claims slumping across the industry, premiums are likely to fall sooner rather than later, he said.

"It augers well for both FBD and our customers and if this current trend delivers acceptable loss ratios, it is realistic to expect reductions in premiums in the short to medium term."

FBD's property and leisure subsidiaries performed strongly last year, generating €9 million profits.

In Spain, the LA Cala Resort and Sunset Beach Hotel delivered in line with expectations. In Ireland, FBD increased its holding in Tower Hotels group to 75 per cent from 50 per cent. The group, which has six hotels in the Republic, performed strongly last year Mr Berkery said.

Plans to set up a personal injuries assessment board were announced by the Government more than 18 months ago.