The average motor insurance premium fell by 7 per cent to €568 in 2022.
The Central Bank's latest Private Motor Insurance report found private motor insurance premiums for the year totalled €1.3 billion, with the frequency of claims rising by 20 per cent.
The research found the average cost of injury claims rose 16 per cent last year, while damage claims rose 20 per cent.
As a percentage of premiums, overall claims rose to 61 per cent, up from 47 per cent in 2021.
The report also noted that the level of cover has increased, with 91 per cent of policyholders opting for comprehensive cover last year, up from 84 per cent in 2019.
Of injury claims settled in 2022, 37 per cent did so via litigation, 15 per cent through the Personal Injury Assessment Board (PIAB), and 48 per cent settled directly with the insurer.
Cases settled through litigation representing the largest cohort in terms of cost, totalling 77 per cent of pay-outs.
The 'direct channel' of settling cases directly with insurers, was the speediest option, with cases taking an average of 1.8 years to reach a settlement. Those settled through PIAB took 2.7 years on average, while cases involving litigation took 4.8 years.
The average settlement for each pathway in 2022 was €9,754 for direct, €15,500 for PIAB and €22,390. However, legal costs associated with litigation were significantly higher than the other methods.
Following the implementation of new guidelines for the assessment of personal injury awards, the report noted a 50/50 split between cases settled using the guidelines and those settled with reference to the Book of Quantum – the previous method used to calculate settlements.
Examining the impact of the guidelines on claim costs, the report stated there has been a 47 per cent reduction for claims settled directly before PIAB, a 32 per cent reduction for claims settled through PIAB, and a 41 per cent reduction in claims settled directly after PIAB.
The report noted there has not yet been enough litigated claims settled under the guidelines to assess the impact on the average cost of a claim which chooses that route.
