Central Bank of Ireland publishes Fourth 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 2021.
• 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 (15 November 2022) published the fourth annual Private Motor Insurance Report of the National Claims Information Database (NCID) (PDF 2.25MB). 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 firms providing this insurance, and key settlement channel information.

This fourth annual Private Motor Insurance Report of the NCID captures data from calendar years 2009 to 2021. It therefore includes data on the initial impact of the (PDF 626.64KB)Personal Injuries Guidelines (PDF 626.64KB), which came into effect in April 2021. As with the 2020 Report, the data is impacted by the Covid-19 pandemic and related government restrictions.

The total earned premium for private motor insurance in Ireland in 2021 was €1.38bn. Among the other key findings published today are –

Cost of Insurance

From 2020 to 2021:

• The average premium cost per policy decreased by 2% to €607.
• Claims cost per policy increased by 1%; however, it was still 20% below pre-Covid levels in 2019.
  • Claims frequency increased by 11%; however, this was still 15% below pre-Covid levels in 2019.
  • The average cost of a claim decreased by 9%.
• Claims as a percentage of premiums was 49%.

Across all years 2009 to 2021:

• On a quarterly basis, as at Q4 2021, the average earned premium decreased 17% from its peak in Q4 2017.
• Claims costs were on average 67% of premiums.
• Claim costs as a percentage of premiums were at their highest point in 2014 at 92% and at their lowest point in 2020 at 47%.

Income and Expenditure

In 2021:

• Operating profit was 13% of total income.
• Combined Operating Ratio (COR) was 80% gross and net of reinsurance.
• Reinsurance was 7% of total income.
• Investment income was 2% of total income.

   

  Across all years 2009 to 2021:

• Operating profit was 4% of total income, in which there were 3 distinct periods:
  • A profit of 8% of total income from 2009 to 2012
  • A loss of 9% of total income from 2013 to 2016
  • A profit of 11% of total income from 2017 to 2021.

Impact of Personal Injuries Guidelines 2021

• For injury claims settled in 2021, 16% of claimants settled under the new Personal Injuries Guidelines.
• For claims that settled through PIAB in 2021:
  • 20% settled under the Guidelines.
  • Average compensation was 34% lower than for claims that settled with reference to the Book of Quantum.

Injury Claim Settlements

Injury Claim Settlement Channels 2019-21:

• 35% of injury claimants settled directly, before PIAB (12% of costs).
• 14% settled directly, after PIAB (11% of costs).
• 16% settled through PIAB (10% of costs).
• 34% settled through litigation before a court award (66% of costs).
• 2% settled through litigation, with a court award (1 % of costs).

Injury Claim Settlement Durations 2015-21:

• 1.4 years for claims settled directly.
• 2.0 years through PIAB.
• 3.9 years through litigation.

Average Cost of Settled Injury Claims for less than €100k, 2015-21:

• For 94% of claimants, the total cost of a claim was less than €100k.
• Where settled directly, average compensation was €13,933 and average legal costs €1,568.
• Where settled via PIAB, average compensation was €21,856 and average legal costs €686.
• Where settled via litigation, average compensation was €24,174 and average legal costs were €15,567.

Commenting, Robert Kelly, Acting Director of Economics and Statistics at the Central Bank of Ireland, said, “We are pleased to publish the fourth 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.

“Today’s Report provides data on the calendar year 2021. Accordingly, it captures the continuing impact of Covid-19 and related government restrictions on the motor insurance industry during that time. While claims cost per policy and the frequency of claims both increased from 2020 to 2021, overall, these metrics have decreased considerably from pre-pandemic levels. 

“The Report includes initial data on the impact of the Personal Injuries Guidelines, which were introduced in April 2021. During 2021, 16% of claimants settled with reference to the Guidelines. While noting that PIAB makes up 8% of injury claim costs settled in 2021, data for claims processed through PIAB shows average compensation was 34% lower for claims settled under the Guidelines, than for claims that settled with reference to the previously applied Book of Quantum. Future reports, including mid-year reports which will commence in 2023, will over time provide a more complete picture of the impact of the Guidelines across all settlement channels.”