Motor insurance premiums up 12pc in just two years as average cost revealed
The average premium is now €616, a rise of €67 since 2022, new data from the Central Bank shows. This is an increase of 12pc in the last two years alone.
The sharp rise comes despite the Government introducing a number of reforms in an attempt to bring down the cost of insurance for motorists.
Among the most significant of these was the agreement by judges to lower the recommended level of payouts in personal injuries cases, and changes to how the Injuries Resolution Board (IRB) operates.
A dedicated garda insurance fraud unit has been set up, with changes to duty-of-care legislation, making it harder for those exaggerating compensation claims to get a payout.
The Alliance for Insurance Reform, a campaign group, said the premium hikes called into question recommendations from judges to increase the size of damages awards.
The Judicial Council has recommended hiking personal injury award guidelines by 16.7pc. This needs to be confirmed by the Government.
The mid-year National Claims Information Database (NCID), which is compiled by the Central Bank from data provided by insurers it regulates, shows motor premiums were up by 9pc in the first half of last year.
This is when compared with the same period of 2023.
How can the Government justify taking steps that will drive the cost of people's car insurance even higher?
The report shows a rise of just 1pc in the number of comprehensive policies. Insurers have cited more people taking out comprehensive cover as one of the factors for the continuing rise in motor premium costs.
The report found 1.2 million motor policies were taken out in the first half of last year. Gross written premiums for these totalled €729m, and 93pc of the policies were for comprehensive cover.
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The Central Bank report shows that the average written premium was €616 in the first half of last year.
This is up from €549 in the second half of 2022, but it is down from €729 in the second half of 2018, after various Government measures brought down the cost of claims.
Brian Hanley of the Alliance for Insurance Reform, said the Central Bank report shows a sharp rise in motor insurance premiums of 9pc in the first six months of last year.
'Set against this, how can the Government justify taking steps that will drive the cost of people's car insurance even higher?' he said.
He added that if adopted, the 17pc increase in personal injury awards will lead directly to even greater increases in car insurance premiums.
Motorists, businesses, sporting, community and voluntary groups simply cannot afford for this to happen
Mr Hanley said Justice Minister Jim O'Callaghan, who is currently considering a recommendation from the Judicial Council that personal injury awards be increased, needs to consider injury awards in this country are higher than in other states.
'Notwithstanding that awards are higher here than in most other countries, and the relatively short time the current award guidelines are in existence (2021), if adopted it will lead directly to even greater increases in policyholder premiums,' Mr Hanley said.
'Motorists, businesses, sporting, community and voluntary groups simply cannot afford for this to happen.'
Lobby group for the industry, Insurance Ireland, said premiums were rising due to damage-cost inflation. It added that current average premium costs remain below the previous high point of €729 in 2017.
But it said the trend of increased damage claims costs continues, while the use of litigation to settle personal injury claims continues to erode the impact of reforms.
Insurance Ireland CEO Moyagh Murdock said: 'Although premiums have begun to increase, reflecting the increased cost environment, Irish motor insurance customers have benefited from significant decreases.'
She said the trend of settling claims via the more expensive litigated route continues to add huge costs, despite the fact it doesn't add to the levels of awards the claimant receives via either the IRB process or directly settling claims with insurers.
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