Insurance companies made €176m in profit in 2022

During 2022, there were 318,000 policies covering employer’s liability insurance, public liability insurance, and commercial property insurance, report shows

In total, insurance companies, that provide liability insurance to businesses, took in €1.29bn in premiums during 2022 — an increase from the €1.1bn in 2021.

Insurance companies providing employer’s liability and public liability cover to Irish businesses made a combined operating profit of €176m in 2022 after taking in nearly €1.3bn in premiums, a new report by the Central Bank shows.

According to the report, during 2022 there were 318,000 policies covering employer’s liability insurance, public liability insurance, and commercial property insurance. The majority of these policies in 2022, 86%, were taken out as part of a package policy.

Of all these package policies, 54% had a premium of €1,000 or less while 98% had a premium of €25,000 or less. The average premium cost €2,781 in 2022.

In total, insurance companies took in €1.29bn in premiums during 2022 — an increase from the €1.1bn in 2021.

In 2022, insurance companies spent €805m on underwriting expenses of which €464m was “gross claims incurred”.

Across the three insurance categories, companies made an operating profit of 14%, or €176m, in 2022. An operating profit of 9%, €98m, was recorded in 2021.

These years were the first years since 2011 that the industry has recorded a material profit.

The report shows of all injury claim settlements in 2022, 70% were settled via litigation before a court award, with 3% settling after a court award.

Just 12% of cases were settled through Personal Injuries Assessment Board (PIAB), while 10% were settled directly before going to PIAB and 6% directly afterwards.

Litigation settlements for employer’s liability cases resulted in the largest average compensation as well as the largest average court fees at over €70,000 and €40,000 respectively.

Public liability cases saw similar results, with the average payout for litigated settlements reaching €37,000 and legal costs reaching over €28,500.

In the case of settlements negotiated directly, the average compensation for employer’s liability cases was €27,400 and public liability cases €13,000. The legal fees for each averaged at €3,286 and €4,002 respectively.

Settlements through PIAB averaged over €26,300 for employer’s liability claims and over €21,400 for public liability claims. Legal fees for both were under €2,000.

In April 2021, new personal injury guidelines aimed at reducing the size of payouts was introduced. Prior to this compensation was with reference to the Book of Quantum.

Between 2021 and 2022, both of these measures were being used to settle different cases. Just 24% of personal injury claims in 2022 were settled under the guidelines while 76% were settled using the Book of Quantum.