Opening Bell: Motor insurance fund, Legal & General's Dublin move, tourism's mixed fortunes

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Motor insurance premiums look set to rise in the coming years as the industry plans to create a €150 million fund to deal with collapsed insurers.

According to The Irish Times, the Government is hoping to put structures in place to avoid a repeat of the three-year saga around compensation claims that arose following the demise of the Malta-registered Setanta Insurance.

The Supreme Court ruled yesterday that the State's Insurance Compensation Fund (ICF) is liable for compensation related to that case, reversing a previous High Court decisions tha the Motor Insurers Bureau of Ireland (MIBI) should meet the costs.

The new plan would see the ICF pay 65% of claims of this ilk, with MIBI paying the remainder.

In the case of Setanta, the estimated 1,750 claims coudl run to €90 million. The Setanta liquidator has claimed he could only meet 30% of this, while the ICF is only liable for €825,000 under existing legislation.

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UK insurance giant Legal & General has picked Dublin as the European base for its investment management arm, the Irish Independent reports.

A LGIM spokesman confirmed the decision to the paper yesterday, with strong indications that more units of the firm will follow in the wake of Brexit.

The move will be subject to regulatory approval and will have "no foreseeable impact on operations and staff in other LGIM locations".

While the total number of jobs created in the capital could be fewer than 50, it represents a big win for the Government given Legal & General's standing in the industry.
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It has been a mixed year for tourism so far, according to the CSO's latest figures.

The number of people choosing Ireland as their holiday destination from the US has risen by 26%.

However, there is now less people coming here from the UK with the uncertainty from Brexit said to be the main reason for the drop off.

Tourism Ireland CEO Niall Gibbons said:

"A mixed picture in terms of results. Overall, just marginally ahead [at] 0.1%. We're seeing our market diversification strategy paying off in that North American visitors for the quarter to the end of April are up almost 26%.

"There's a drop in the number of visitors from Great Britain to Ireland over the last quarter of almost 11%. And it means really that we have to work harder, be much more competitive in that marketplace. The economic situation in Britain is much more uncertain and that's having an impact on the number of British people travelling abroad."

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The Chinese economy is heading for trouble, according to Moody's.

The ratings agency has doubled down on comments earlier this week that huge corporate and household debt would financially erode China, stating that even its "cast reform agenda" would not be enough to stop borrowing hampering growth.

Moody's has said that another credit rating downgrade is possible if the borrowing issue is not rectified.

Li Xiujun, vice president of Moody's credit strategy and standards, said:

"If in the future China's structural reforms can prevent its leverage from rising more effectively without increasing risks in the banking and shadow banking sector, then it will have a positive impact on China's rating."