Cost of motor insurance claims fell by €10m between 2009 and 2018

Further doubt has been cast over suggestions by the insurance industry that the cost of motor claims have been rising after Central Bank data indicated that between 2009 and 2018, the ultimate cost of claims fell by about €10 million.

In every category but third party injury claims, the cost of claims dropped over the period, data published on Monday by the regulator shows.

The cost of accidental damage claims fell from €170 million to €96 million in the period, fire and theft claims were €19 million lower at €13.5 million, while the cost of third party damage claims had fallen by €30.8 million to €71 million.

Meanwhile, third party injury claims did rise to €597 million from €478 million, but even with this rise, the ultimate cost of claims was lower in 2018 than it was in 2009.

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The data accompanies a report issued in December after the National Claims Information Database was established.

The figures also show that the absolute number of claims have fallen significantly. Across all headings, some 270,432 claims were made in 2009 but by 2018, that had fallen to 166,194. That came as the absolute number of policies rose over the period from just over 1.8 million to 1.86 million.

Litigation

The Central Bank also looked at the proportion of claimants who arrived at an award, or not as the case may be, through the various channels open to them. In 2015, 4,228 cases were litigated and that had risen to 4,714 by 2018. Meanwhile, the number of claims that were settled directly with the insurer or went to the personal injuries assessment board fell from 10,223 to 9,613.

That change meant that insurers paid €71 million more in 2018 to deal with litigated claims than the €273 million figure in 2015.”

By 2018, legal costs accounted for €112 million of the €345 million total cost of litigated claims, up from €92 million in 2015. Overall compensation cost sin such cases were €230 million in 2018, up from the €173 million four years previously.

The Central Bank report to which this data relates noted that premiums rose by 42 per cent between 2009 and 2018. It found that the average cost of claims per policy fell by 2.5 per cent from €437 to €426 between 2009 and 2018 while average premiums jumped by 42 per cent from €498 to €706.

The Central Bank’s Private Motor Insurance Report of the National Claims Information Database also revealed that the industry here generated an average operating profit of 9 per cent last year, nearly twice the level of profitability seen in the UK.