The average cost of motor insurance during the first half of last year stood at €655, marking a 4% increase compared to the previous year.
New figures from the Central Bank of Ireland also show that the total cost of claims in the first six months of last year rose by 2% compared to 2024, and was 25% higher than the pre-Covid average, reports RTE.
Data from the National Claims Information Database indicates that the total cost of settled claims during the same period fell by 4% compared to 2024 and was 24% below pre-Covid levels.
The figures also revealed that in the first half of 2025, 85% of all injury claims were resolved under the Personal Injuries Guidelines, including 70% of cases that went through litigation, reports RTE.
Insurance Ireland, which represents companies operating in the Irish market, said that although premiums increased by 4% in the first half of last year, overall levels remain significantly below those seen before recent reforms.
It noted that motor insurance premiums fell by 10% between 2018 and 2024, despite rising cost-of-living pressures over the same period, reports RTE.
The organisation’s chief executive, Moyagh Murdock, said it acknowledges that any rise in premiums is “challenging for consumers,” but added that pricing remains below 2018 levels.
The group said the cost of claims continues to be a major factor influencing premiums, reports RTE.
“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.”,
According to Ms Murdock, “the biggest, proven cost driver isn’t a hidden mark-up, it’s litigation”, reports RTE.
She said the litigation process “takes about five years versus 2.5 to 2.7 years through the Injuries Resolution Board” and that it “adds heavy legal costs with no material uplift in awards”.
Ms Murdock added that the Central Bank data shows “litigation is the slowest and costliest route to resolve injury claims”, reports RTE.
“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.”,
“If we’re serious about affordability, we should back the Government’s Insurance Reform Action Plan, especially the actions targeting legal-cost inflation and shifting more claims to the Injuries Resolution Board”, she said, reports RTE.
The Alliance for Insurance Reform said that motor insurance premiums are now almost 20% higher than they were in late 2022.
It warned that rising policy costs are placing significant financial pressure on motorists, reports RTE.
The group said the latest Central Bank data highlights how higher repair costs and an increase in damage claims are contributing to rising premiums.
Board member Tracy Sheridan said the figures confirm that “repair costs are pushing premiums higher”, reports RTE.
“But that is not the whole story. Injury costs have continued to fall, the Personal Injuries Guidelines are now applying in most claims, and motorists are entitled to ask whether those savings are being fully reflected in the price of cover.”,
Ms Sheridan, who owns Kidspace play centres in Rathfarnham and Rathcoole, said that while repair-cost inflation is real, “after years of reform and wider savings, it must not become a blank cheque for insurers”, reports RTE.
She called on the government to continue implementing measures in the Action Plan for Insurance Reform and urged that the new Motor Insurance Transparency Code should encourage genuine competition and consumer switching.
Robert Troy said the latest Private Motor Insurance Mid-Year Report shows affordability remains a concern, reports RTE.
He noted that while premiums rose by 4% in the first half of 2025 compared to 2024, they are still more than one-third lower than the peak seen in 2016.
Mr Troy said the data indicates a clear shift away from the Book of Quantum system, with 85% of injury claims now being settled under the Personal Injuries Guidelines, reports RTE.
“The data confirms that smaller litigated claims settled under the Guidelines attract lower compensation costs than comparable claims assessed under the Book of Quantum, underscoring the effectiveness of the Guidelines in delivering more consistent and proportionate awards.”,
According to Mr Troy, the report shows that the Government’s reform efforts — particularly the role of the Injuries Resolution Board and the guidelines — are helping to reduce and stabilise injury claim costs, reports RTE.
However, he added that insurers must ensure these savings are fully passed on to consumers through lower premiums.
“Similarly, continued growth in legal costs in litigated cases is also notable, particularly given that claimants receive comparable levels of compensation through the Injuries Resolution Board”, he said, reports RTE.
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