- Second Private Motor Insurance Report provides key statistics on the private motor insurance industry in Ireland.
- Key findings include figures on the cost of claims, premiums levels, and how private motor insurance claims are settled.
- Report will play an important role in supporting evidence based decision making as well as providing greater transparency to the market.
The Central Bank of Ireland has today published the second annual Private Motor Insurance Report of the National Claims Information Database (NCID). The Report is being published to improve the overall transparency of the private motor claims environment. As well as providing an analysis of the cost of claims, the cost of premiums, how claims are settled, variance in and components of settlement costs, it is expected that the Report will inform policymaking.
The NCID houses aggregate data collected from insurers, including premium and claims data. All insurers selling private motor insurance in Ireland were required to submit data to the NCID, regardless of country of authorisation.
Director of Economics & Statistics, Mark Cassidy, said “This, the second Motor Insurance Report, provides key information to enable understanding of the operation of the motor insurance market in Ireland.
“The insurance industry plays a critical role in the Irish financial services industry and for the economy and its citizens. The new data that we are releasing today will improve transparency in the Irish motor insurance market, particularly with regard to claims costs, settlement channels and premiums paid by customers.
“The report has been extended this year to provide further information on settlement channels, premium trends and information on Claim Development Patterns, which are important enhancements that can assist market participants in their understanding of claims costs.”
Among key points, the Report notes that between 2009 and 2019:
- The average cost of a claim rose 65% while the frequency of claims fell 45%
- Cost of claims per policy fell 9% while the average earned premium per policy rose 35%
- Claims costs were 72% of earned premium between 2009 and 2019
- 2009 had a loss ratio of 88%; 2019 had a loss ratio of 59%
More specifically, between 2018 and 2019:
- The average cost of a claim rose 4%; and the frequency of claims fell 5%
- Cost of claims per policy fell 1%; average earned premium per policy fell 4%
- 2018 had a loss ratio of 57%; 2019 had a loss ratio of 59%
- Profit was 10% of income in 2019 while it was 9% of income in 2018
In terms of Injury Claimant Settlements between 2015 and 2019
- 50% of injury claimants settled directly, 17% settled through PIAB and 33% settled through litigation
- 22% of injury costs settled directly, 12% settled through PIAB and 67% settled through litigation
- Average compensation for a direct settlement was €13,427 and average legal costs were €1,397
- Average compensation for a PIAB settlement was €23,137 and average legal costs were €716
- Average compensation for a litigated settlement was €46,214 and average legal costs were €23,409
Of the claimants who settled injury claims through litigation during 2015 to 2019, 85% settled for less than €100K. For these claimants the average compensation was €23,572 and average legal costs were €14,949.
The new data collected for this report shows us that for claimants who settled injury claims in 2019
- 39% settled before PIAB
- 13% settled directly, after PIAB
- 14% settled through PIAB
- 31% settled through litigation, before a court award
- 2% settled through litigation, with a court award
- The Cost of Insurance Working Group was established in 2016 to examine the factors contributing to the increasing cost of insurance and to identify measures to reduce this cost, taking account of the requirement to maintain a financially stable insurance sector. The focus of the first phase of its work was on the rising costs of motor insurance, which culminated in the publication of the Cost of Motor Insurance Working Group: Report on the Cost of Motor Insurance in January 2017.
- Recommendation 11 in this report required the Central Bank of Ireland to establish a National Claims Information Database (NCID), to improve data availability. Legislation was required to confer this new function on the Central Bank, and the Central Bank (National Claims Information Database) Act 2018 commenced in January 2019. The legislation requires that the Central Bank publishes a report on an annual basis.
- Firms writing private motor insurance in Ireland are members of the Motor Insurance Bureau of Ireland (MIBI).
- The Personal Injuries Assessment Board (PIAB) is Ireland’s independent state body which assesses personal injury compensation.
- The Central Bank introduced new rules which came into force on 1 November providing greater transparency to policyholders at the point of renewal for certain non-life insurance products.
- The Central Bank will seek to commence data collection in H2 2020 and publish the first Employer Liability (EL) and Public Liability (PL) NCID report in H1 2021.
- Liability insurance consists of a broad range of business sectors covering a variety of risks and this increases the complexity of data collection. The collection of EL and PL data needs to be an incremental undertaking with additional data collected over a number of years.