Central Bank of Ireland publishes sixth annual Private Motor Insurance Report of the National Claims Information Database

The Central Bank of Ireland has today (24 October 2024) published the sixth annual Private Motor Insurance Report of the National Claims Information Database (NCID) (PDF 2.45MB). The report captures data from calendar years 2009 to 2023. 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 the private motor insurance sector, and key settlement channel information.

The total gross earned premium for private motor insurance in Ireland in 2023 was €1.29bn. Among the other key findings published today are:

Cost of Insurance

• Between 2022 and 2023 the average written premium cost per policy increased 2% to €568.
• The average cost of a claim per policy increased by 5% in 2023 to €369.
• Damage claims cost per policy has increased to €178 due to the increased average cost and frequency of damage claims.
• Injury claims cost per policy is lower than pre-pandemic levels at €191. This is due to the frequency of claims not returning to pre-pandemic levels, and the average cost of injury claims reducing.

• The level of cover has also increased in recent years - 93% of policies in 2023 had comprehensive cover, compared to 83% in 2017.

• Claims as a percentage of premiums increased to 67% in 2023 from 62% in 2022.

Income and Expenditure in 2023

• Combined Operating Ratio (COR) was 86% gross and 91% net of reinsurance.
• Operating profit was 8% of total income in 2023.

• An operating loss of 1% on current year claims, was offset by reserve releases on prior years which contributed 9% to operating profit.

Settled Claims in 2023

• Total Settled Claims Cost was €693m in 2023, the highest in the time series.
• Damage claim costs have overtaken injury claims costs and now account for 53% of total settled claims costs – up from 47% in 2022.
• For injury claims settled in 2023:
• 45% settled directly with an insurer with an average time taken to settle of 1.9 years.
• 17% settled through the Injuries Resolution Board with an average time taken to settle of 2.7 years
• 37% settled through litigation with an average time taken to settle was 5.1 years.

Personal Injuries Guidelines

For injury claims settling directly or through the Injuries Resolution Board, virtually all claims settling in 2023 settled under the Guidelines.

For injury claims settled through litigation in H2 2023:

• 27% settled under the Guidelines.
• 73% settled with reference to the Book of Quantum.

• The average cost of claims that settled under the Guidelines in 2023 (when compared to claims that settled in the same channel under the Book of Quantum in 2020) were:

• 38% lower for claims that settled directly before the Injuries Resolution Board;
• 22% lower for claims settling through Injuries Resolution Board; and
• 39% lower for claims settling directly after the Injuries Resolution Board

Commenting, Robert Kelly, Director of Economics and Statistics at the Central Bank of Ireland, said, we are pleased to publish the sixth 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.”

“The data released today show that premiums increased 2% in 2023.

Claims costs have increased, returning to pre-COVID levels and we note a change in the composition of claims. The frequency and costs of damage claims have increased, while the frequency and costs of injury claims have decreased. Overall in 2023 we see an increase in claims costs as a percentage of premiums. The market was profitable in 2023 with insurers operating profit being 8% of total income. The enhanced data collected for this report allows us to see that an operating loss of 1% on current year claims was offset by reserve releases on prior years which contributed 9% to the operating profit.

We note that the application of the Personal Injuries Guidelines continued to progress in 2023 with all claims in the Direct and Injuries Resolution Board channels along with 23% of litigated claims settling under the guidelines.  Significant reductions in average claim costs are seen in the Direct and Injuries Resolution Board channels.

It is still not possible to determine the full impact of the Guidelines on claims settling through litigation. This is important to note as 76% of all injury costs were associated with litigated claims. However, the report details decreases in the average compensation costs for the 84% of claimants whose claims settled for less than €100K in the litigated channel.”

ENDS

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