It is “essential” that insurance savings are passed onto consumers in the near future, an industry expert has argued.
New figures released by the Central Bank today revealed that the average price of car insurance increased by 9% between 2023 and 2024.
The average driver now spends €623 insuring their car, according to the Central Bank.
On Lunchtime Live, Alliance for Insurance Reform Director Brian Hanley said the rising cost of vehicle repairs is to blame.
“Last year, there were increases in the volume of repairs and an increase in the cost of each one of those being resolved,” he explained.
“Supply chain issues, so that means there were delays fixing cars and that means maybe there were car rental costs associated then.
“There are other costs of doing business that have gone up considerably in the last year or two as well.”
Traffic on the M50 motorway. Picture by: Leon Farrell/RollingNewsMr Hanley continued that the overall number of awards have dropped in recent years.
If the trend continues, it is likely to bring down prices in the years ahead.
“It is disappointing but it’s not surprising for your listeners to see today’s figure of a 9% increase,” he said.
“It’s really important that repair inflation doesn’t become a blank cheque or a jumping off point for premium increases.
“That any increases are genuinely and narrowly tied to whatever the increase in cost is.”
Future costs
Mr Hanley added that despite recent reforms designed to reduce insurance payouts, awards are “still above European countries”.
“Ultimately, this does boil back to the cost of repairs in the last while has outstripped the savings so far that have been made,” he said.
“There are other savings to come and I think it’s really important we see those passed on.
“The 1% Motor Levy is gone, the Insurance Compensation Fund will be halved next year, uninsured driving has halved since 2022.
“As more and more cases are settled each year using the guidelines, that too show put down pressure on premiums.”
Mr Hanley described it as “essential” such savings are passed onto drivers.
Main image: A young woman driving a car. Picture by: Tero Vesalainen / Alamy
