Paul Walsh, spokesman for Peopl Insurance

Commenting on the Private Motor Insurance Mid-year update of the National Claims Information Database (NCID), just published by the Central Bank of Ireland

“Today’s report shows that average motor insurance premiums increased by 0.5pc in the first half of 2023 when compared to 2022. This follows a trend whereby average premiums had been falling since the second half of 2017 – and this is very worrying. There has been great progress in reducing the cost of claims and motor insurance premiums in recent years and if this is now heading the wrong direction, ultimately consumers – who are already financially squeezed following the record inflation of recent years – will pay.

The substantial rise in the cost of damage claims is worrying. Today’s report shows that the total cost of damage claims settled in the first half of 2023 was 126pc higher than the 2015 to 2019 average and that this is the main driver for the leap in claims costs.

High inflation is likely at the heart of much of the increase in the cost of damage claims. It is well documented that soaring inflation has led to shortages of labour and car parts worldwide and that this in turn has driven up the cost of car repairs. Last year, Peopl Insurance warned that higher repair costs could push up car insurance premiums and today’s report is evidence that this is happening. Indeed research conducted by Peopl Insurance in the Spring of last year[1] found that more than one in two Irish motorists had already seen their motor insurance bill increase.  If the cost of damage claims continues to go up, so too will the rate that motor insurance premiums will increase by. It is important that the progress made on motor insurance costs and claims costs in recent years is not undone.

It is worrying that despite recent reforms, such as the personal injury guidelines, litigated channels still account for the vast majority of injury claims costs.

More needs to be done to encourage people to use the Personal Injuries Assessment Board (PIAB) because this will ultimately reduce claims costs – and in turn insurance costs for consumers. Motor insurance premiums would likely fall further if we could strip out the legal bills associated with claims pursued through the courts.

It has never been more important for consumers to shop around for motor insurance. Not shopping around at renewal will always mean that people pay over the odds for their premium. Loyalty to just one insurer doesn’t pay.”

[1] Conducted in early 2023 by iReach on 1000 people nationwide.