Motor insurance premiums up as damage claims drive higher settlement costs 

Firms offering private motor insurance took in €798m in premiums across 1.22 million policies between January and June last year.

The average price of motor insurance premiums increased by 4% during the first half of 2025 — compared to 2024 — to €655 as the cost of settlements also grew, largely driven by damage claims, the latest data from the Central Bank of Ireland shows.

The data shows firms offering private motor insurance took in €798m in premiums across 1.22 million policies between January and June last year. This is an increase from the €748m taken in across 1.18 million policies during the latter half of 2024.

The cost of the average written premium has fallen by 24% from its highest point of €730 in 2017, with premiums hitting their low point of €552 in the second half of 2022. However, they have been steadily increasing since.

The Alliance for Insurance Reform pointed out motor premiums are a fifth higher than they were in late 2022.

Board member of the Alliance Tracy Sheridan said injury costs had continued to fall and “motorists are entitled to ask whether those savings are being fully reflected in the price of cover”.

Insurance Ireland, the insurance sector’s representative group, said while premiums had increased in this most recent report, they are down below those seen prior to recent reforms.

Chief executive of Insurance Ireland Moyagh Murdock said "reform is working where claims stay out of court” and “every claim resolved earlier and outside of litigation is a saving for policyholders”.

The data also shows the total cost of claims settled during the first half of 2025 stood at €374m — an increase of 2% compared to the second half of 2024, and 25% more than the pre-pandemic average.

Since 2023, damage claims have overtaken injury claims as the largest component of claim costs — accounting for 56% of all claims in the first half of last year.

Higher repair costs

The alliance also said the data underlined the extent to which higher repair costs and the increase in damage claims were now feeding into motor premiums.

“Repair-cost inflation is real, but after years of reform and wider savings, it must not become a blank cheque for insurers,” Ms Sheridan added.

The total cost of damage claims settled stood at €210m across just under 67,000 claims — with average cost to settle a damage claim reaching €3,146. This is an increase from €194.8m during the second half of 2024, and from €205.3m during the first half of last year.

For injury claims, settled for less than €100,000, between January and June last year — which accounts for 94% of all injury claims — the average compensation cost stood at €23,955. The average total cost across all injury claims is €35,774.

There were about 4,600 injury claims settled in the first half of 2025, with a total cost of €164m, which compares to about 4,400 claims and €172m in costs in the second half of 2024.

There were 269 claims settled for over €100,000 at a total cost of €61m during the first half of last year. 

Of all injury claims, 85% were settled under the personal injury guidelines.

Costs to settle an injury claim were lowest when done directly, at €14,233, taking into account both the compensation and legal costs. The average cost going through the Injuries Resolution Board stood at €22,658.

However, when cases are litigated, the overall average cost goes up to €66,100 — down from €80,259 during 2024 — with legal costs alone accounting for €26,752 on average.

Most of the reduction in this channel year-on-year was seen in lower compensation awards, which dropped from an average of €48,379 in 2024 to €37,013 during the first half of 2025.

Claims settled through litigation took on average 4.7 years to settle.

Junior minister responsible for insurance Robert Troy said reforms to the insurance sector, particularly through the Personal Injuries Guidelines, was “delivering lower and more predictable injury claims costs”.

“However, insurers must ensure these savings are fully reflected in motor insurance premiums.”