Falling insurance premiums will continue but may be shortlived unless the concerted effort to cut costs is maintained, according to leading broker Coyle Hamilton.

"There is a package of issues to be addressed," says Mr Jim O'Mahoney, managing director of corporate broking. "These are the activation of the Personal Injuries Assessment Board, the passage into law of the Civil Liability and Courts Bill (which will require both parties to swear to the truth of their statements and impose stringent penalties on those caught in a lie) and a shift in culture in relation to fraudulent and exaggerated claims."

Coyle Hamilton says the end result of the current downward trend "may be to remove the current level of over-pricing". "However, the relative weakness of international insurance and reinsurance companies' balance sheets will mitigate against wholesale rate reductions," the broker states in its annual commentary.

Chief executive Mr Hugh Governey warned firms against complacency. "We are advising clients not to take their foot off the pedal in regard to risk management," he said.

The broker expects increased competition with new entrants to the Irish market but says these are likely to concentrate on niche areas rather than providing a service across the full insurance spectrum.

On the pensions side, corporate employee benefits executive Mr Stephen Lalor said 2003 had marked a return to positive territory for pension funds. "We're not out of the woods yet although we are looking in the right direction," he said. However, he characterised it as a "brittle recovery".

Key issues in pensions for 2004 would be dealing with downsizing, the continuing deficits in defined benefit schemes and communication and training, Coyle Hamilton says.

Mr Joe Byrne, of actuarial services, said there was a continuing problem with poorly funded defined contribution pension schemes that would have to be addressed.