Report published on Private Motor

Insurance Market in Ireland

The Central Bank of Ireland which has responsibility for regulating the insurance sector published its first annual Private Motor Insurance Report last month. The report covers a wide range of issues in the Motor Insurance Market including figures on the costs of claims, premium levels and settlement of Private Motor Insurance Claims.

The report is lengthy and draws on a number of sources of information including the National Claims Information Database.

The main findings of the report include the following:

Cost of claims per policy: Between 2009 and 2018, the average cost of claims per policy decreased by 2.5% from €437 in 2009 to €426 in 2018. Between 2009 and 2013 claims costs reduced by 14% to €375, followed by an increase of 14% to €426 in 2018.

Premium per policy: Between 2009 and 2018, the average premium per policy increased by 42% from €498 in 2009 to €706 in 2018. Between 2009 and 2013, average premiums decreased by 13% to €435, followed by an increase of 62% to €706 in 2018.

Loss Ratio: Claims were on average 75% of premiums between 2009 and 2018. This peaked at 94% in 2014 before dropping to 59% in 2017. In 2018, it was 60%.

Number of claims: Between 2009 and 2018, claims frequency reduced by 40%. In this time injury claims reduced by 20% and damage claims reduced by 43%.

Cost of a claim: Between 2009 and 2018, the average cost of a claim increased by 64%. In this time injury claims increased by 54% and damage claims increased by 2%.

Settlement channels: In the period 2015 to 2018, 53% of all injury claimants settled directly while 31% of injury claimants settled through litigation; 16% of injury claimants settled through PIAB.

Direct Settlements: Directly settled injury claims had an average compensation of €11,674 in the period 2015-2018, in addition average legal costs were €1,385, and claims took on average 1.7 years to settle.

Personal Injuries Assessment Board (PIAB) Settlements: Injury claims settled through PIAB had an average compensation of €22,631 in the period 2015-2018, in addition average legal costs were €753, and claims took on average 2.5 years to settle.

Litigated Settlements (total): Injury claims settled through litigation had an average compensation cost of €45,390 in the period 2015-2018, in addition average legal costs were €23,031, and claims took on average 4.4 years to settle. Litigated settlements costing more than €100k account for 15% of claimants settling through litigation but account for 53% of total litigated costs and involve a number of very large settlements. These very large settlements can have a significant impact on the average compensation and legal cost figures.

Litigated Settlements less than €100k: Injury claims settled through litigation with total settlement costs less than €100k (85% of litigated claimants) had an average compensation of €23,199 in the period 2015-2018 (i.e. comparable with the average compensation of claims settled through PIAB) and average legal costs of €14,684.

2018 private motor revenue results: Insurers’ Gross Combined Operating Ratio (COR) on private motor business was 81% and Net COR was 88%. As firms do not account for private motor insurance business separately, an income and expenditure statement was prepared on a proportioned basis.

If you require any further detail or advice, please contact John Reid in O’Rourke Reid
Dial: +353 1 240 1200
Email: jreid@orourkereid.com
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This document is for information purposes only and does not purport to represent legal advice.  
© O’Rourke Reid 2020