Motor-insurance premiums up 9% in 2024
Figures from the Central Bank show that the cost of the average motor-insurance premium rose by 9% last year to €623.
The figures are contained in the latest report on the motor sector from the National Claims Information Database (NCID).
The cost of claims per policy increased by 3% to €397 in 2024 – the highest it has been since 2014, according to the Central Bank.
said that the rise in claims costs was led by damage claims – damage claims cost per policy increased to €192, while injury claims cost per policy remained lower than pre-pandemic levels at €205.
Inflation
The Central Bank pointed to high level of inflation in recent years, saying that this affected the motor-insurance sector through higher costs for replacement parts and repairs.
It said that the average cost of smaller injury claims had fallen in recent years, but this had been offset by an increase in the average cost of larger injury claims.
The report found that insurers’ operating profit in 2024 represented 4% of total income – down from 8% in 2023. The figure for the years between 2010 and 2024 was 5%.
The total cost of claims settled in 2024 was €792m.
Damage claims accounted for 54% of total claims costs – an increase from the 29% average between 2015 and 2021.
The number of damage claims increased by 6%, while the average cost of such claims increased by 18% compared with 2023.
Injury claims
While the number of injury claims rose by 16% compared with 2023, the figure was still below the pre-COVID average.
For injury claims settled in 2024:
- 48% settled directly with an insurer, with an average time taken to settle of 1.8 years,
- 16% settled through the Injuries Resolution Board (IRB), with an average time to settle of 2.7 years, and
- 36% settled through litigation, with an average time taken to settle of five years.
The report said that “virtually all” injury claims settled directly or through the IRB were settled under the Personal Injuries Guidelines last year.
Comparing these figures with those from 2020 that were settled under the Book of Quantum, the report found that costs were:
- 33% lower for claims that settled directly before the IRB,
- 8% lower for claims settling through the IRB, and
- 26% lower for claims settling directly after the IRB.
Litigation
Figures for the second half of 2024 showed that 57% of claims settled through litigation did so under the guidelines, with the remainder settled under the Book of Quantum.
The Central Bank said an analysis of compensation awards for small claims settled through litigation suggested that average compensation costs were 25% lower compared with similar claims settled under the Book of Quantum.
“While there has been an upward trend in the number of claims settled and the associated costs since the COVID years, it is important to highlight the total cost of injury claims settled in 2024 was 16% lower than the average from 2015 to 2019, with the total number of injury claims settled being 23% lower,” said Robert Kelly (director of economics and statistics, Central Bank).
Insurers ‘slow’ on savings
Commenting on the report, Minister of State Robert Troy said that, while the Government had delivered reforms to cut claims costs, insurers had been slow to pass on savings to consumers.
“I have been emphatically clear with the insurance industry that I fully expect the cost savings achieved through the reform agenda to be passed on to consumers in the form of reduced premiums,” he stated.
He said that work had started on a ‘transparency code’ for the sector that would require insurers to provide “simple and comparable explanations of how premiums are formed, and what broader factors influence pricing”.