Litigation blamed by industry for car insurance costs
Data shows that between 2018 and 2024, motor insurance premiums have decreased by 10% but in 2025, there was a 4% year on year increase.
Commenting on the Central Bank of Ireland’s NCID Private Motor Insurance Mid-Year 2025 Premium Data Release published last week, Insurance Ireland said that while average premiums increased by 4% in the first half of 2025 compared to 2024, overall premium levels remain significantly below those seen prior to recent reforms.
While the cost of claims remains a key driver of premiums, recent trends show a mixed picture. The total cost of claims settled in H1 2025 was 25% higher than the 2015 to 2019 pre-Covid average, and 2% higher than in H2 2024. This increase is largely driven by growth in the volume and cost of damage-related claims, rather than injury claims.
Data shows that between 2018 and 2024, motor insurance premiums have decreased by 10%, at a time when households have experienced sharp increases in other every day costs. Over the time period of 2018 to 2024, grocery prices increased by 29%, fuel by 23% and rent in Dublin by 35%.
About the NCID Private Motor Insurance Mid-Year 2025 report, Moyagh Murdock, CEO of Insurance Ireland, said: “The latest data from the NCID shows that premiums increased by 4% compared to 2024. We recognise that any increase in premiums is challenging for consumers, however, the data clearly shows that overall pricing remains below 2018 levels.
“Recent talk of ‘mark-ups’ from some members of the Law Society ignores the Regulator’s data. The biggest, proven cost driver isn’t a hidden mark up, it’s litigation. It takes about five years through the Injuries Resolution Board and adds heavy legal costs with no material uplift in awards.”
Ms Murdock added: “NCID data shows year after year that litigation is the slowest and costliest route to resolve injury claims, averaging five years compared to 2.7 years via the Injuries Resolution Board. These delays and associated costs ultimately put upward pressure on the system in a way that simply does not occur when claims are settled through faster, lower cost channels.”
In H1 2025, 85% of injury claims were settled under the Guidelines, including 70% of litigated cases, and average costs in IRB/direct channels are lower than pre Guidelines, so reform is working where claims stay out of court, stated Ms Murdock.
“Every claim resolved earlier and outside of litigation is a saving for policyholders. That’s where affordability is won or lost.
“On Transparency, we welcome the Government’s Motor Insurance Transparency Code and even though voluntary, the sector has signed up across the market, including all major motor insurers. From Q2, customers will receive a Premium Summary Statement and an Annual Market Overview Statement at quote and renewal, explaining individual risk factors and wider market conditions in clear, comparable language. Implementation is phased from March 2026 with an independent review within 18 months. In parallel, the NCID provides the ultimate transparency, industry wide, regulator audited data that we support and use and is unique to Ireland compared to the rest of Europe. We accept the numbers the Central Bank publishes each year.”
To be serious about affordability, says Ms Murdock, the Government’s Insurance Reform Action Plan should be backed, especially the actions targeting legal cost inflation and shifting more claims to the Injuries Resolution Board.
“In particular, Action 6 of the Government’s reform programme, which seeks to address legal cost inflation, remains critical to ensuring that premiums can remain stable and sustainable for consumers over the longer term.”
