If collective wage agreements are not maintained, the Republic's insurance industry will become significantly less competitive, the managing director of Eagle Star has said. Mr Ian Stuart said losing control of wage inflation, due to a breakdown of collective agreements, would place "the Irish insurance industry at a disadvantage at a time of increasing European competition and continuing industry rationalisation".

He was speaking at a function in Dublin to mark the integration of Irish National into Eagle Star.

He added that two other issues continued to be critically important to the industry. "Road safety is a serious problem which is proving to be increasingly difficult for the authorities to address without significant additional resources being made available," he said.

He predicted that the frequency and severity of claims would continue to increase as a result. He stated that increasing employers' liability claims were driving up premiums and were an issue which had be tackled "as a matter of urgency". He said employers' liability insurance was one factor currently preventing Irish industry competing on an equal footing in Europe.

The function to mark the integration of Irish National by Eagle Star was attended by the Minister for Finance, Mr McCreevy.