Average motor claim cost in Ireland rose 4% between 2018 and 2019

Irish financial services regulator the Central Bank of Ireland has revealed that the average cost of a motor claim in Ireland has increased by 4% between 2018 and 2019, but frequency of claims has dipped by 5%.

Since 2009, however, the average cost of a motor insurance claim in Ireland has risen by 65%, but the frequency of these claims fell by 45%.

This information has been published as part of the regulator’s second annual Private Motor Insurance Report of the National Claims Information Database (NCID) report, which aims to improve the overall transparency of the private motor claims environment and is expected to be used to inform policymaking.

The NCID houses aggregated data from insurers, including premium and claims data. All insurers selling private motor insurance in Ireland are required to submit data to the NCID, regardless of their country of authorisation.

Other key points from the report include:

• Between 2009 and 2019, the average earned premium per policy rose by 35% and the cost of claims per policy fell by 9%. In addition, claims costs amounted to 72% of the earned premium between 2009 and 2019.
• Between 2018 and 2019, the cost of claims per policy fell by 1% and the average earned premium per policy decreased by 4%.
• In 2019, there was a loss ratio of 59% and profit was 10% of income.

In terms of injury claimant settlements between 2015 and 2019:

• 50% of injury claimants settled directly, 17% settled through independent statutory body the Personal Injuries Assessment Board (PIAB) and 33% settled through litigation.
• 22% of injury costs were settled directly, 12% were settled through the PIAB and 67% were settled through litigation.
• The average compensation for a direct settlement was €13,427 and average legal costs were €1,397.
• Average compensation for a PIAB settlement was €23,137 and average legal costs were €716.
• Average compensation for a litigated settlement was €46,214 and average legal costs were €23,409.

Of the claimants who settled injury claims through litigation between 2015 to 2019, 85% settled for less than €100,000. For these claimants, the average compensation was €23,572 and average legal costs were €14,949.

Speaking on the report, the Central Bank of Ireland’s director of economics and statistics Mark Cassidy said: “This, the second Motor Insurance Report, provides key information to enable understanding of the operation of the motor insurance market in Ireland.

“The insurance industry plays a critical role in the Irish financial services industry and for the economy and its citizens. The new data that we are releasing today will improve transparency in the Irish motor insurance market, particularly with regard to claims costs, settlement channels and premiums paid by customers.

“The report has been extended this year to provide further information on settlement channels, premium trends and information on claim development patterns, which are important enhancements that can assist market participants in their understanding of claims costs.”