The Central Bank of Ireland has just released the National Claims Information Database Private Motor Insurance Report 2023, offering a detailed and in-depth analysis of the motor insurance market. This comprehensive report not only highlights essential trends and data that affect premiums, claims, and the overall industry landscape but also provides valuable insights into the factors driving these changes. By examining the latest market dynamics, the report helps consumers and industry professionals better understand the evolving motor insurance environment. In this blog, we address the key questions raised by the report and explore what these developments mean for you.
What’s driving premium increases?
In 2023, motor insurance premiums increased by 2%. This rise is largely due to the higher cost of claims. Damage claims have become more expensive, driven by inflation, advanced vehicle technology, and delays in repairs. These factors increase the complexity and cost of settlements, which naturally impacts premiums.
What trends are emerging in damage and injury claims?
- Damage Claims: The average cost per policy has gone up because of more frequent claims and higher costs per claim. Notably, damage claims settled in 2023 cost 118% more than the 2015-2019 average, with a 24% increase in the number of claims.
- Injury Claims: In contrast, injury claim costs per policy have dropped, thanks to the Personal Injury Guidelines (PIGs) introduced in 2021. These guidelines have helped reduce the overall cost of settling injury claims.
How do settled claims affect overall costs?
Despite the decline in injury claims costs, the total cost of settled claims (both injury and damage) rose by 21% in the first half of 2023 compared to 2022. Damage claims alone have increased by 61% from 2020 to 2023, highlighting the need for efficient claims management to keep costs in check.
Why is litigation so costly?
Litigation remains a significant concern, accounting for 91% of all claim costs in the first half of 2023. Prolonged legal processes drive up expenses, making it crucial to settle claims efficiently to avoid costly court proceedings.
How is the motor insurance market performing?
Despite the rising costs, the motor insurance sector reported an operating profit of 8% of total income in 2023, with a combined operating ratio (COR) of 86% gross (91% net of reinsurance). This shows a stable financial performance amidst market challenges.
What Does This Mean for You?
Understanding these trends helps policyholders make better decisions about their motor insurance. At LHK Group, we stay on top of these developments to offer you the best advice and solutions. We are committed to helping you find the right coverage at the best value.
Contact us today to speak with the LHK team. We’re here to help you navigate the evolving motor insurance landscape and find the best coverage tailored to your needs.
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