Central Bank of Ireland publishes fifth annual Private Motor Insurance Report of the National Claims Information Database

• Report provides key statistics on the private motor insurance industry in Ireland.
• Report captures data from calendar years 2009 to 2022.
• Key findings include figures and trends on premium levels, the cost of claims, insurers’ income and expenditure, and how private motor insurance claims are settled.

The Central Bank of Ireland has today (13 December 2023) published the fifth annual Private Motor Insurance Report of the National Claims Information Database (NCID). The NCID compiles aggregate data received from insurers. This allows the Central Bank to publish an annual report containing analysis on the cost of premiums, the cost of claims, the aggregated financial performance of the private motor insurance sector, and key settlement channel information.

The total earned premium for private motor insurance in Ireland in 2022 was €1.3bn. Among the other key findings published today are:

Cost of Insurance

• Between 2021 and 2022 the average premium cost per policy decreased by 7% to €568.
• The average cost of a damage claim increased by 20% in 2022. This means the average cost of damage claims is up 35% since 2020.
• Claims as a percentage of premiums increased to 61% in 2022, up from 47% in 2021.
• The level of cover has also increased in recent years - 91% of policies in 2022 had comprehensive cover, compared to 84% in 2019.

Income and Expenditure in 2022:

• Operating profit was 12% of total income.
• Combined Operating Ratio (COR) was 88% gross and net of reinsurance.

Settled Claims in 2022:

• Damage claims now make up 46% of settled claims costs – up from 30% in 2021.
• Claims that settled through litigation comprised the largest portion of costs for injury claims settled in 2022:
  • 77% of costs settled in the litigation channel
  • 7% of costs settled through the Personal Injuries Assessment Board (PIAB)
  • 16% of costs settled directly with the insurer.
• 50% of all injury claimants settled under the Personal Injuries Guidelines compared to 16% in 2021 - these claimants made up:
  • 85% of claims settling directly before PIAB
  • 75% of claims settling through PIAB
  • 61% of claims settling directly after PIAB
  • 6% of claims settling through litigation.
• For injury claims that settled under the Guidelines either directly with the insurer or through PIAB in 2022 the average cost of claims was lower compared to claims settled with reference to the Book of Quantum in 2020:
  • 47% lower for claims settling directly before PIAB
  • 32% lower for claims settling through PIAB
  • 41% lower for claims settling directly after PIAB.
• Only a small number (6%) of litigated claims have settled under the Personal Injuries Guidelines to date and therefore their impact in this channel cannot yet be accurately determined.

Commenting, Robert Kelly, Director of Economics and Statistics at the Central Bank of Ireland, said, “We are pleased to publish the fifth annual Private Motor Insurance Report of the NCID today. The NCID provides a detailed source of data on insurers in Ireland, providing an invaluable resource for policymakers and stakeholders as well as the wider financial services industry.”

“The data released today show that premiums continued to fall in 2022. Claims costs have increased, returning to pre-COVID levels, but driven by an increase in the cost of damage claims. The sector however remained profitable in 2022 earning a 12% profit.”

“We note that the application of the Personal Injuries Guidelines continued to rise in 2022 with 50% of all injury claims being settled with reference to the Guidelines. Significant reductions in average claim costs are seen in the direct and PIAB channels. However it is still not possible to determine the impact of the Guidelines on claims settling through litigation due to the small number of claims settling through this channel. This is important to note as 77% of all injury costs were associated with litigated claims.”