The cost of motor third-party injury claims below €250,000 increased by 42 per cent between 2011 and 2016, mainly as a result of claims for whiplash, a new study has found.
The report also reveals that while numbers of injuries are considerably lower in Ireland than in the UK, costs per claim are much higher here, typically coming in at between €40,000 and €60,000 locally, compared with between £11,000 and £13,000 in Britain.
According to the report, it is generally taking longer to settle claims than in previous years, which is leading to higher outstanding case and actuarial reserves.
Between 2011 and 2016, the increase in the average earned premium per policy was 22 per cent.
The latest report was published alongside an update on the progress made by the Cost of Insurance Working Group, which was set up to investigating a dramatic rise in motor insurance costs.
Minister of State for financial services and insurance Michael D’Arcy said a number of actions contained in the working group’s action plan have yet to be completed.
Insurance Ireland chief executive Kevin Thompson said the study showed the steep increases in injury claims costs in the Irish motor market and the urgent need to reform these costs.
“It is clear insurers are trying to manage claims inflation by reducing the costs they have direct control over, such as damage claims. However, a combination of increased injury costs and longer settlement times are impacting on the market and these must be addressed through the policy solutions in the Cost of Insurance Working Group report,” Mr Thompson said.
According to Central Statistics Office data, motor insurance inflation has stabilised since the third quarter of 2016. On a year-on-year basis prices were 13.8 per cent lower in the 12 months to the end of March and are now 19 per cent lower than at their peak in July 2016.
