Reports show motor premiums continuing to fall
- The reduction in motor premiums is continuing apace with a 24% (approx.) reduction overall, from the end of 2017 to October 2021, based on a combination of NCID and CSO data.
- Average profitability 3% over the last 12 years which includes operating profits and losses
- Impact of high legal costs remain a concern, also the low uptake of PIAB settlement route
16 November 2021: Insurance Ireland today welcomed the latest NCID report which highlights overall reduced cost of claims and a clear downward trajectory in overall motor premiums.
The reduction in motor premiums is continuing apace with a 24% (approx.) reduction overall, from the end of 2017 to October 2021, based on a combination of NCID and CSO data. The NCID report points to a reduction of 16% from Q4 2017 to end 2020 while the most recent CSO data shows an 8% reduction in motor premiums from December 2020 to October 2021. Insurance Ireland believes that the impact of insurance reform which is resulting in a lower cost of claims could bring further benefits to consumers.
Moyagh Murdock, Chief Executive of Insurance Ireland said “The annual NCID report provides valuable insights into developments in the marketplace. It is good to see the downward trajectory in overall motor premiums which is the key issue for consumers. I have always believed that the implementation of necessary reforms and greater stability in the market would deliver clear benefits for consumers and the NCID report provides clear evidence of this.
Ultimately, reduced costs bring reduced premiums, and Insurance Ireland members remain committed to passing on the benefits of lower costs of claims to customers. This is evidenced by the fact that the most recent CSO figures demonstrate a further reduction in premiums in 2021 of 8% against a backdrop of rising inflation. I continue to be concerned at the high level of legal fees which continue to feed into overall litigated awards. This is an important element in the overall necessary reforms which needs to take place in the interests of consumers and the economy.
It is essential that the other measures in the Action Plan for Insurance Reform are also progressed. These measures include the strengthening of the powers of PIAB, the rebalancing of the duty of care and increased competition in the market. It is particularly crucial that we see a strengthening of PIAB’s ability to settle cases so that fewer cases go to the courts where the legal costs add so much to the overall cost of settling claims.
The insurance sector fully supports the Government’s Action Plan for Insurance Reform and believes that the new Judicial Guidelines on personal injuries is a key element in delivering that reform and in helping to create an environment that is less volatile and one which can deliver more consistent outcomes for customers. Insurance Ireland and its members will continue to work proactively with Government on the implementation of its full action plan.
It is now approximately six months since the introduction of the new Judicial Guidelines, so we are still in a transition phase with cases yet to come before the courts. Meaningful reductions in award levels will lead to decreased volatility and increased competition in the market over time.
In addition to a reduction in premiums, it’s important to note that the members of Insurance Ireland have returned in excess of €56m in rebates to both private and commercial motor customers. The industry is paying out in excess of €430m in business interruption claims throughout the pandemic as well as providing many forbearance measures such as premium holidays and suspensions and step back measures.”