Alarming tales of spurious claims and unsustainable insurance hikes were two-a-penny at yesterday's launch of the Alliance for Insurance Reform, with almost every attendee having a horror story to tell.

Century Homes chief executive, Mr Gerry McCaughey told of how exaggerated claims had caused such problems for the Monaghan-based company that he has decided to transfer the construction of a new 20,00 sq ft manufacturing plant to Northern Ireland.

Mr McCaughey said expansion plans for the Republic had been placed on "permanent hold" because so many claims had been made against the company in connection with building work. "This is a real, live example of how jobs are being affected in the Republic," he said.

Century Homes has seen an 85 per cent increase in insurance premiums in the last year alone, with the company's 2002 bill hitting €235,000. Mr McCaughey believes insurance companies bear partial blame for this increase because of their tendency to settle cases without sufficient contest. He said his policy of assigning a private detective to every personal injury action taken against Century Homes had shown that most claims, even those that were legitimate, had been exaggerated.

He referred to one individual who claimed that an injury sustained on Century Homes property had left him so disabled that he could no longer leave his home without aid. A private detective filmed him driving his car to and from a local pub, repairing a stock car and working in two jobs within the space of one weekend, leaving the claim open to automatic dispute, according to Mr McCaughey.

Another alliance member, Mr John Fielding of Wexford-based JF Engineering, described how his insurance costs had risen by 1,575 per cent from £2,000 (€2,540) to €27,500 in the space of two years, despite his company having attracted no insurance claims in the period.

"This year, I was asked for €40,000 which was eventually beaten down to €27,500," said Mr Fielding. "I had to borrow money to pay for this, and if the premium is similar next year, I won't be in business and my six employees will be out of jobs."

Mr John Cullen of West End Knitwear in Kildare told of how a 400 per cent increase in insurance premiums over two years had led him to move one of his two businesses to the Baltics, with the loss of 45 Irish jobs.

Mr Cullen said that insurance cover for the foreign operation with a German underwriter was 20 per cent cheaper than it had been in the Republic. This underwriter had declined to provide cover for the Irish company because of the unattractiveness of the market in the Republic, Mr Cullen said.