There was a 23% increase in the cost of settling motor insurance claims during the first half of last year compared to the second half of 2023, according to latest figures from the Central Bank’s National Claims Information Database (NCID).
It shows the cost of motor claims settled between January and June 2024 was €414 million, with the Central Bank attributing the higher cost to an increase in damage claims.
Meanwhile, the figures show the number of motor injury claims settled increased by 10% between January and June 2024 compared to the second half of 2023, but remained 20% lower than the 2015-2019 pre-Covid average.
For motor injury claims that settled for less than €100,000 in H1 2024, the average compensation cost was down 23% compared to 2020, while the average total cost decreased by 13%.
When including all injury claims however, the average total cost is effectively unchanged at €38,553, highlighting the contribution of large injury claims towards total claims costs.
In H1 2024, three quarters (75%) of all claims were settled under the Personal Injury Guidelines – this includes 46% of litigated claims.
Separately, the NCID shows the total cost of employers’ liability and public liability claims fell by 10% to €144 million between the first half of 2024 and the preceding six months (H2 2023).
The number of injury claims over the period (which accounted for the vast majority of all public liability claims) remained effectively unchanged at €2,100.
In H1 2024, 42% of all employers and public liability injury claims were settled under the Personal Injuries Guidelines (22% of litigated claims).
The figures also show that despite a fall in the number of injury claims, legal costs remain elevated.
For claims under €100,000, legal fees rose to €7,128 during the first half of 2024, up from €5,512 (2015–2019 pre-Covid average).
With regard to litigated claims, legal costs accounted for over 40% of the total claim cost in H1 2024.
The rise in the cost of motor insurance claims comes as the Judicial Council’s proposed 16.7% increase in the Personal Injuries Guidelines is due to be approved by the Government.
Commenting on the NCID figures, the Alliance for Insurance Reform said they “make clear the Government’s looming increase in personal injury awards couldn’t come at a worse time for policyholders”.
Tracy Sheridan, owner of Kidspace play centres in Rathfarnham and Rathcoole and an Alliance board member said: “The only bright spot had been the reduction in the cost of injury awards and now the Government is set to increase these by (almost) 17%.
“If this happens there will be no check on costs. We are already seeing month-on-month premium increases as the cost of living continues to spiral out of control. The Government needs to stand up for policyholders, not make things more difficult for them,” she added.
Regarding the fall in the cost of liability claims, Ms Sheridan said “there really is no excuse for liability premiums not to come down for business, sport, community and voluntary organisations as the cost of claims continues to reduce”.
Meanwhile, Insurance Ireland – the group representing insurers – said it notes “with growing concern” the “sharp rise in claims costs and the escalating burden of legal expenses”.
It said “these trends, if left unaddressed, pose a serious risk to the progress made by the Government’s action plan for insurance reform for motor insurance for Irish consumers”.
Insurance Ireland also said “now is not the time to introduce an increase to the Personal Injuries Guidelines”.
Brokers Ireland also points to what it says are “inflated legal costs”.
Hazel Rock, Head of Insurance Services at Brokers Ireland, said the guidelines are having a clear cost-reducing effect on employer and public liability claims settled either directly or via the Injuries Resolution Board but that “there is still some way to go before we see the full impact of the measures taken by the Government to date.
“While industry reports would suggest more competition is entering the market in areas where it has been limited to date, nonetheless insurance brokers still face the consequences of limited insurer appetite in high risk and niche sectors,” she said.
“The Injuries Resolution Board is underutilised, with a majority of claims still going to litigation, contributing to inflated legal costs.
“Granting greater authority to the IRB and making awards binding in most cases, would help greatly, but concerns remain about the impact on premiums of the proposed 16.7% increase in injury awards,” Ms Rock added.
