Cost of motor insurance drives 9% higher, according to the Central Bank

The Central Bank of Ireland (CBI) has published its latest review of the Irish motor insurance sector — a report that never fails to raise a few eyebrows among drivers.

The Private Motor Insurance Report aims to shed light on how the industry operates, especially around claims and premiums, which have been a major talking point in Ireland in recent years.

Drawing on data from the National Claims Information Database, the report provides detailed analysis on the cost of premiums, the number of motor insurance claims, the level of payouts, and how claims are settled.

Here’s a look at some of the latest key findings... 

Premiums

According to the report, the cost of motor insurance in Ireland increased by 9% last year, something many drivers will be all too aware of.

This left the average premium at €623 for 2024, though it had even increased further to €635 in Q4 of last year.

However the price drivers will have actually paid for their insurance will have differed wildly depending on their age, where they live, the type of car they drive, their no-claims bonus and even their occupation. 

Despite the rise in the cost of motor insurance last year, it's still below where it was just under a decade ago. In Q3 of 2017, the average cost of car insurance was a hefty €738. So premiums are still well below this level — for now at least. 

When looking at a wider period from 2010 to 2024, the average car insurance premium has risen by 21%. And this can be split into four distinct periods:

• A decrease in premiums of 16% between 2010 and 2013
• An increase in premiums of 67% between 2013 and 2017
• A decrease in premiums of 23% between 2017 and 2022
• An increase in premiums of 12% between 2022 and 2024

Cost of Claims 

The cost of settling personal injury claims has long been a hot topic of conversation in Ireland, with insurers blaming this for the high cost of insurance here.

In recent years, as a result of judicial reforms, the cost of smaller personal injury claims has come down. But this has been offset by an increase in the number and cost of damage claims (for vehicle damage etc) and an increase in the cost of larger personal injury claims. 

Damage claims are increasing for various reasons: there are more drivers than ever on Irish roads, so more accidents are taking place. And many of us are driving bigger and more expensive cars that come with high-tech features which cost more to repair and replace. An increase in the cost of labour, a shortage of spare parts, and wider inflation are also to blame.

In 2024, damage claims accounted for 54% of settled claim costs, a significant increase from the 29% average between 2015 and 2021.

Overall in 2024, the cost of claims per policy increased by 3% to €397.

The cost per policy of damage claims increased to €192 in 2024, which is the highest it has been since the Central Bank started compiling the data. This compares to a cost of just €102 per policy for the pre-Covid 2015-2019 average. 

The average cost per policy of injury claims has stabilised at around €200 between 2022 and 2024. This compares to €257 for the pre-Covid 2015-2019 average.

Income and expenditure

Motor insurers are earning relatively healthy profits, but not nearly as high as recent years. So there are no major sign that drivers are being "ripped off". 

Insurers’ operating profit for 2024 was just 4% of total income. This compares to operating profit of 12% for 2020 for example.

Again, four distinct periods were observed:

• operating profits of 9% from 2010 to 2012
• operating losses of 9% from 2013 to 2016
• operating profits of 11% from 2017 to 2021
• operating profits of 8% from 2022 to 2024

What can I do to bring down the cost of my car insurance? 

With the cost of car insurance on the rise, it's never been more important to look for the best value. Here are some ways to cut the cost of your cover. 

1. Shop around and compare quotes extensively

Don't just auto-renew. Shop around each year. 

All insurers calculate risk slightly differently, so the same cover can differ wildly in price from one company to another. Don't settle for the first quote you receive.

But don't just look at price. Consider the insurer's reputation, customer service, and claims history too.

2. Understand your cover needs

Don't pay for cover you don't need but also don't under-insure yourself and risk financial hardship. In some cases, third-party only or third-party, fire and theft cover might be more suitable than fully comprehensive. 

3. Choose a higher excess if you can afford it

Increasing your excess can lower your premium. However, only choose an amount you could realistically pay out of pocket if you need to make a claim. There's no point in saving a little on your premium if a small accident leaves you in financial distress.

4. Improve your driving record

This is a long-term strategy, but it's incredibly effective. Drive safely, adhere to traffic laws, and avoid accidents. A clean record will always be your best friend when it comes to cheaper car insurance.

5. Consider paying annually

If you can afford it, paying your entire premium upfront for the year is often cheaper than paying in monthly instalments, as insurers often charge extra fees for monthly payment plans.

6. Keep your details up to date

Changing jobs, address, or how you use your car (e.g. less commuting, more remote work) can all positively affect your risk profile — and your premium. So let your insurer know if any of this changes.

7. Avoid unnecessary add-ons

Things like windscreen cover, breakdown assistance, or key replacement might be useful — but if you have them elsewhere (like through AA membership or a bank account), drop them.

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