The Central Bank of Ireland today published the fifth annual private motor insurance report of the National Claims Information Database (NCID), which shows a sharp increase in cases settled under the guidelines from just 16 per cent in 2021.

As a result, the average cost for claims has declined since 2020 by 47 per cent for those settled directly before PIAB, 32 per cent for those settled through PIAB, and 41 per cent for those settled directly after PIAB.

However, only six per cent of litigated claims settled under the personal injuries guidelines, leading litigation to make up 77 per cent of total settlement costs for injury claims in 2022. This reflects the long time taken to settle these claims — 4.8 years on average in 2022.

Robert Kelly, director of economics and statistics at the Central Bank of Ireland, said: “The data released today show that premiums continued to fall in 2022. Claims costs have increased, returning to pre-Covid levels, but driven by an increase in the cost of damage claims. The sector however remained profitable in 2022 earning a 12 per cent profit.

“We note that the application of the personal injuries guidelines continued to rise in 2022 with 50 per cent of all injury claims being settled with reference to the  guidelines. Significant reductions in average claim costs are seen in the direct and PIAB channels.

“However it is still not possible to determine the impact of the guidelines on claims settling through litigation due to the small number of claims settling through this channel. This is important to note as 77 per cent of all injury costs were associated with litigated claims.”

Jennifer Carroll MacNeill, the minister of state for financial services, credit unions and insurance, said: “The Central Bank report shows that the new personal injuries guidelines are working with half of all injury claimants that settled in 2022 doing so under the guidelines, compared to 16 per cent in 2021, including the majority of claims that settled either direct or through PIAB.

“We need to keep working to ensure the guidelines continue to stick and that all solicitors engage fully with the PIAB process.

“However, the Central Bank’s report also highlights that litigation remains a main driver of claims costs, an issue I am raising directly with firms in the industry and with the Law Society of Ireland.

“I am also engaging with insurers on the need for them to increase their risk appetites and reduce prices for home owners, voluntary groups and businesses so that they too can benefit from the recent package of insurance reforms by government in a way that motorists already have.”