Recent reports from the Central Bank and the Injuries Resolution Board suggest that insurers in Ireland are maintaining high profit margins, as personal injury claims fall and award levels decline, MSN reported.
According to the Central Bank’s latest National Claims Information Database (NCID) report, insurers recorded a 13% profit margin in 2023—more than twice the international benchmark of 5%. During the same period, average liability insurance premiums rose by 4%, and by 17% between 2020 and 2023.
These figures come as the Injuries Resolution Board reports a one-third reduction in personal injury claims volumes since 2019, along with a 20% to 30% decline in award values since the introduction of the Judicial Guidelines in 2021.
Despite similar average compensation across both litigation and board settlements, the majority of claims continue to be resolved through litigation, where legal fees typically add a further €23,000 per case. By comparison, legal costs average around €1,000 through the board, while around 4% of litigated claims reach court, the report said.
These legal cost differences contribute to the overall cost of claims, which insurers cite as a factor in setting premiums. However, stakeholders have raised concerns that policyholders are not seeing the benefit of lower award values or reduced claim volumes.
Attention is now turning to the Judicial Council’s proposal to increase personal injury award levels by nearly 17% as part of its first scheduled review of the guidelines. The recommendation is currently under consideration by the Minister for Justice and is expected to be brought before the Oireachtas.
Some industry representatives have warned that higher awards may shift more claims out of the Injuries Resolution Board and into litigation, adding to legal costs and increasing pressure on premiums. There are also reports that some judges have begun applying the proposed increase ahead of formal approval.
Calls have been made for further scrutiny of the proposal through the relevant Oireachtas committee. Others have pointed to the need for greater competition in the liability insurance market, as outlined in the current Programme for Government.
With the Department of Finance conducting a public consultation on the next phase of insurance reform, the focus remains on ensuring that recent changes translate into more stable and affordable premiums for policyholders.
