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Jennifer Carroll MacNeill, the Minister of State for Financial Services, Credit Unions and Insurance, has today (Wednesday, 13 December) noted the publication of the fifth National Claims Information Database (NCID) Private Motor Insurance Report for 2022 by the Central Bank:
“It’s good to see that many individuals and families benefitted from reduced motor insurance premiums again in 2022 at a time when they were experiencing significant inflationary pressures elsewhere. Having more affordable motor insurance with a greater protection of cover is a good position for over 2 million policyholders to be in.
"The Central Bank report shows that the new Personal Injuries Guidelines are working with half of all injury claimants that settled in 2022 doing so under the Guidelines, compared to 16 per cent in 2021, including the majority of claims that settled either direct or through PIAB. We need to keep working to ensure the Guidelines continue to stick and that all solicitors engage fully with the PIAB process.
"However, the Central Bank’s report also highlights that litigation remains a main driver of claims costs, an issue I am raising directly with firms in the industry and with the Law Society of Ireland.
"I am also engaging with insurers on the need for them to increase their risk appetites and reduce prices for home owners, voluntary groups and businesses so that they too can benefit from the recent package of insurance reforms by Government in a way that motorists already have.”
The Central Bank of Ireland has today (Wednesday, 13 December 2023) published the fifth Private Motor Insurance Report of the National Claims Information Database (NCID). The NCID is a repository that stores information on the cost of non-life insurance claims. The Central Bank of Ireland is responsible for collecting the information and managing the NCID under the Central Bank (National Claims Information Database) Act 2018.
The purpose of the NCID is to improve transparency around the cost of settling claims, and the impact this has on the cost of insurance. It achieves this by storing claims data at a greater level of detail than in the past. This enables better analysis and improved decision-making in relation to the cost of insurance.
This latest Private Motor Insurance Report contains data for the period up to 31 December 2022, including information on claims settled under the Personal Injuries Guidelines.
The report shows that the average earned premium decreased by 7 per cent to €568 in 2022 compared to 2021, which is down from €705 in 2018. The Report also found that the proportion of policies that include comprehensive cover (rather than third party cover) has increased over recent years, from 84 per cent of policies in 2018 to 91 per cent in 2022.
The Report also contains further data on the Personal Injuries Guidelines, which have been in place since April 2021, highlighting that half of all injury claimants that settled in 2022 did so under the Guidelines, compared to 16 per cent in 2021, a figure which includes the majority of claims that settled either direct or through the Personal Injuries Assessment Board (PIAB).
The Personal Injuries Guidelines have not yet materially impacted the cost of claims settled via litigation, which represent the largest proportion of the total injury claims cost, owing to the generally longer time taken to settle these claims (4.8 years on average in 2022). In 2022, just 6 per cent of claimants that settled through litigation settled under the Guidelines.
The average earned premium per policy decreased by 7% in 2022 to €568.
On a quarterly basis, as at Q4 2022, the average earned premium has decreased by 22% since its highest point in Q4 2017.
Claims cost per policy increased by 20% in 2022 but are still 2% below pre-COVID levels in 2019.
Claims as a percentage of premiums increased to 61% in 2022 from 47% in 2021.
Claims frequency increased by 20% in 2022, and are now similar to the pre-COVID levels in 2019.
The average cost per claim increased by 1% in 2022.
Insurers’ operating profit was 12% of total income.
Combined Operating Ratio (COR) was 88% gross and net of reinsurance.
The net cost of reinsurance was 4% of total income.
Investment income was 4% of total income.
Total settled claims in 2022 were approximately:
Two offsetting effects can be observed in the total settled claim costs and numbers in 2022 compared to previous years:
Injury claimants settled by channel:
Injury claim costs settled by channel:
Average duration of injury claims settled by channel:
For 94% of claimants, the total cost of a claim was less than €100K:
For injury claims settled in 2022:
Injury claims settled under the Guidelines by channel in H2022:
Impact on average injury claim cost by channel for injury claims settled in 2022, compared to claims settled under the Book of Quantum in 2020:
There have not been enough litigated claims settled under the Guidelines to assess the impact on the average cost of a claim in this channel.