Motor-insurance premiums crept up last year
Figures from the Central Bank show that the average cost of a motor-insurance policy last year rose by 2% to €568, after five years of falls.
The average cost of a claim per policy increased by 5% in 2023 to €369.
The figures are contained in the bank’s annual Private Motor Insurance Report of the National Claims Information Database (NCID).
The report finds that damage claims cost per policy have increased to €178, due to the increased average cost and frequency of damage claims.
Injury-claims cost per policy is lower than pre-pandemic levels at €191. The Central Bank says that this is because the frequency of claims has not returned to pre-COVID levels, and the average cost of injury claims has fallen, due to the impact of the Personal Injuries Guidelines.
Claims costs rise
Claims as a percentage of premiums increased to 67% in 2023 from 62% in 2022.
The total cost of settled claims last year was €693 million in 2023 – the highest recorded in the six NCID reports to date.
Damage-claim costs have overtaken injury-claims costs and now account for 53% of total settled claims costs – up from 47% in 2022.
For injury claims settled in 2023:
- 45% settled directly with an insurer, with an average time taken to settle of 1.9 years,
- 17% settled through the Injuries Resolution Board (IRB), with an average time taken to settle of 2.7 years, and
- 37% settled through litigation, where the average time taken to settle was 5.1 years.
Guidelines
The NCID report says that “virtually all” injury claims settled directly or through the IRB did so under the Personal Injuries Guidelines. For those settled through litigation, however, the figure was just 27%, as 73% settled with reference to the Book of Quantum.
The average cost of claims that settled under the guidelines in 2023 (when compared with claims settled in the same channel under the Book of Quantum in 2020) were:
- 38% lower for claims that settled directly before the IRB,
- 22% lower for claims settling through the IRB, and
- 39% lower for claims settling directly after the IRB.
“It is still not possible to determine the full impact of the guidelines on claims settling through litigation. This is important to note as 76% of all injury costs were associated with litigated claims,” said Robert Kelly (director of economics and statistics at the Central Bank).
“However, the report details decreases in the average compensation costs for the 84% of claimants whose claims settled for less than €100,000 in the litigated channel,” he added.
Overall operating profit in the motor-insurance sector was 8% of total income – down from 12% in 2022.