Celtic Tiger: Ireland’s economy continues to roar

Over the last decade the Irish economy has experienced a dramatic transformation, growing at considerably higher levels than its European peers according to the latest report by the Lloyd’s Market Intelligence Unit.

Earning the title of ‘Celtic Tiger’, the substantial growth of the economy is a result of a number of factors: a young and well-educated population, industrial peace, strong economic reforms, foreign investment and marked inward migration.

The report, which is produced for the benefit of Lloyd’s managing agents, believes the establishment in 1988 of the Irish Financial Services Centre (IFSC) has helped Ireland develop its economy and has led to Dublin becoming an important global financial centre, offering a basket of services in banking, insurance, funds management and foreign exchange transactions.

Even though the Irish economy is expected to continue to grow over the medium term, growth is likely to be marginally lower than in the past decade. At the same time, investment in transport, health and education are expected to be significantly higher, which is likely to squeeze public finances going forward.

Irish non-life premium levels have shown little overall growth since 2004 reaching $9.4bn in 2006. Business in Ireland is dominated by motor, property and liability lines.

A unique aspect of the Irish insurance market is its large proportion of foreign risks, representing 45% of the total market. Therefore, the Irish market can be divided into two distinct segments, domestic risks and foreign risks. Domestic risks are characterised by strong price competition and falling rates, while foreign risks are growing amid fiscal incentives for companies to become established, according to the report.

Lloyd’s Market Intelligence has produced a detailed brief on Ireland, which managing agents can download at: www.lloyds.com/marketintelligence