Litigation predominant for settling injury claims
The Central Bank has reported signs of stabilisation in private motor insurance costs, despite average premiums continuing to rise year-on-year in 2025.
Publishing its annual report from the National Claims Information Database (NCID) (20 October) the Central Bank said premiums showed a decreasing trend in the final two quarters of 2025.
This mirrors trends in the Central Statistics Office’s consumer price index for insurance, which recorded further decreases into 2026.
Data is critical
Central Bank Director of Insurance Seána Cunningham said access to clear data on motor insurance was critical for policymakers, industry participants and consumers, given that insurance is compulsory for all drivers and represents a significant household expense.
The research found that claims accounted for approximately 60% of premiums received by insurers in 2025, making claims settlements the largest component of insurance costs.
Damage claims accounted for 32% of premiums, while injury compensation represented 17%.
Legal and other expenses associated with settling claims accounted for approximately 10%.
Insurers also incurred operational expenses equivalent to 22% of premiums, while broker commissions accounted for 8%.
Reinsurance costs and contributions to the Motor Insurers’ Bureau of Ireland (MIBI) each represented approximately 3% of premiums, according to the report summary.
The Central Bank said the figures continued to reflect the impact of the personal injury guidelines, with declining injury claim numbers and average compensation levels contributing to greater market stability.
However, the report found that litigation remained the predominant channel for settling injury claims.
For claims valued at less than €100,000, average compensation received through the Injuries Resolution Board was comparable to compensation obtained through other channels.
Most motor damage claims and associated costs continued to be settled directly rather than through litigation.
The findings also examined insurers’ financial performance.
When other sources of income, including investment income, were taken into account, insurers recorded operating profit before interest and tax of 7%.
Although annual premium costs remained higher in 2025, the downward trend in the latter half of the year and continued decreases in insurance prices into 2026 suggest that some pressure on premiums may be easing.
The Central Bank said multiple factors determine the prices paid by households, with claims costs, operating expenses and other business costs all contributing to the final premium.
Ongoing monitoring
The regulator said private motor insurance would remain an important area for ongoing monitoring.