Central Bank motor-insurance data shows that the total number of settled claims during a six-month period last year came to 67,000, with 94% of these relating to damage and 6% to injuries.

The cost of settling these claims reached €278m, split 55% towards injury claims and 45% towards damage.

The cost of motor insurance fell by 5% in the first six months of last year. The report captures data up to 30 June 2022.

The cost of claims settled directly by the Personal Injuries Assessment Board (PIAB) has  also fallen by between a third and half since the introduction of the new Personal Injury Guidelines by the judiciary in 2021.

One-third of personal-injury claims were settled through litigation for the period under review, according to the first mid-year Private Motor Insurance Report of the National Claims Information Database (NCID). 

Offsetting effects

The data also show that while the number and costs of damage claims rose, the number and cost of injury claims fell, with the effects offsetting each other.

When it comes to settlements during the first half of last year, nearly half happened through the direct channel, accounting for 15% of injury claim costs.

A further 13% went through PIAB, making up just 6% of claims costs, while 39% through litigation, making up around 79% of injury costs.

Litigation was the slowest channel, taking 4.8 years on average, followed by PIAB at 2.7 years and 1.8 years for those who settled directly.

Those who used litigation to settle their claim received average compensation of €22,473 but faced legal cost of €17,813.

 Key findings include:

• Average earned premium per policy was €578 during this period, a decrease of 5% from the average earned premium in 2021,
• An increase in the number and cost of damage claims,
• A decrease in the number and cost of injury claims,
• 48% of claimants settled directly, making up 15% of total costs,
• 13% of claimants settled through PIAB, making up 6% of total costs,
• 39% of claimants settled through litigation, making up 79% of total costs.

Overall, for injury claims settled during H1 last year, 43% of claimants settled under the guidelines and 57% of claimants settled with reference to the Book of Quantum.

The proportion of injury claims settling under the guidelines in H1 2022 was:

• 80% for claimants that settled directly, before engagement with PIAB,
• 64% for claimants that settled through PIAB,
• 48% for claimants that settled directly after engagement with PIAB,
• 3% for claimants that settled through litigation.

The average cost of claims settled under the guidelines in H1 2022 was less than the average cost of claims that settled under the Book of Quantum in 2020. This applies to claims settled directly and via PIAB.

• Claims that settled directly before engagement with PIAB saw a reduction of 47% in average costs,
• Claims that settled through PIAB saw a reduction of 34%,
• Claims that settled directly after engagement with PIAB saw a reduction of 38%,
• There have not been enough litigated claims settled under the guidelines to assess the impact on the average cost of a claim in the litigation channel.

Robert Kelly (Central Bank director of economics and statistics) said: “Today’s report shows average private motor premiums have fallen by 5% in the first half of 2022 compared to 2021.

“We also note two contrasting effects on settled costs compared to previous years, which may reflect the impact of the pandemic and the current inflationary environment. There was an increase in the number and cost of damage claims and a decrease in the number and cost of injury claims.

Book of Quantum

“We can see from today’s report that 43% of all injury claims settled under the guidelines in the first half of 2022.  For claims settled directly and via PIAB in H1 2022, the average cost of claims was lower for those settled under the guidelines, compared with those settled under the Book of Quantum.

“There have not yet been enough litigated claims settled under the guidelines to determine the impact on the average cost of a claim in this channel. This is important to note as 79% of settled injury-claim costs in H1 2022 went through this channel.

“This data will provide significant initial insights for policymakers and stakeholders, complementing the annual Motor Insurance Report, which will be published later this year,” he said.