Average motor insurance premiums rose by 62% in Ireland between 2013 and 2018.
The First Motor Insurance Report from the Central Bank has found that the average cost of a premium rose from €435 to €706 over the five-year period.
The report examines the last ten years of the motor insurance industry by looking at information contained in the National Claims Information Database.
It finds that premium costs dropped by 13% between 2009 and 2013 – before skyrocketing in the following years.
The report found that the number of claims dropped by 40% over the ten-year period; however the cost of each claim shot up by 64% at the same time.
There was a 20% drop in injury claims and a 43% drop in damage claims; however the cost of injury claims rose by 54% and the cost of damage claims rose by 2%.
The Central Bank noted that it is far cheaper to settle injury claims through the Personal Injuries Assessment Board (PIAB).
- Direct settlements had average compensation of €11,674 with legal costs of €1,385
- Litigated settlements had average compensation of €45,390 with legal costs of €23,031
- Litigated settlements of claims worth less than €100,000 had average compensation of €23,199 with legal costs of €14,684
- PIAB Settlements had average compensation of €22,631 with legal costs of €753
The Central Bank says the more cases settled through PIAB, the greater the potential for lower premiums.
Central Bank Director of Economics & Statistics Mark Cassidy said the report will help the Oireachtas Cost of Insurance Working Group in considering issues in the insurance industry.
He said the Central Bank has no mandate to fix prices in the sector but is focused on “ensuring that the insurance sector sustainably serves the needs of the economy and its customers.”