Central Bank of Ireland Publishes Annual NCID Private Motor Insurance Report and additional research on the factors driving the cost of motor insurance

Central Bank of Ireland has today (Tuesday 20 October) published its annual Private Motor Insurance Report of the National Claims Information Database (PDF 2.14MB) (NCID). 

The report is accompanied by additional research, designed to help consumers understand the costs associated with insurance and what insurers use their premiums for.

Both reports feed into the work of the Central Bank in supporting the Action Plan for Insurance reform. The reports look to continue to enhance transparency in the sector and increase understanding of the issues affecting Ireland's insurance market.

Speaking on publication, Director of Insurance Seána Cunningham said: “Today, the Central Bank is publishing analysis of the data gathered by the NCID on private motor insurance. Everyone who drives a car must have insurance, so changes in insurance costs directly affect Irish household budgets. It is critical that policy makers, industry participants and consumers can easily access and understand data and insight on the sector.

“The data shows that the average private motor insurance cost continued to rise on a year-on-year basis in 2025 but there were encouraging signs in the last two quarters as a decreasing trend was visible. This mirrors the trend seen in the CSO consumer price index for Insurance which has also seen the average price of a premium continue to decrease into 2026.

“Our additional research explores where the premium that consumers pay ultimately goes. It shows that the biggest cost for insurers in 2025 is paying out on claims, adding up to 60% of your premium. This is made up of damage claims at 32% of your premium and injury claims at 17% of your premium. The remaining 10% is paid out in legal and other costs associated with the claim settlement process.

“The data continues to reflect the positive impact of the personal injury guidelines, with decreasing injury claim numbers and average compensation levels contributing to market stabilisation.”

Claims costs are not the only costs that insurance companies face. Like other businesses, insurers also face expenses in 2025 to keep their business running (22% of premium). Brokers also receive a commission for attracting and signing up new customers (8% of your premium) and there is a cost (3% of premium) in using reinsurance to transfer and spread risk.

The ultimate objective of an insurance company is that they can pay out on all claims and make a profit. In 2025, insurers took in more in premium than they paid out in costs. This, coupled with investment income is how insurers mainly make profit. The operating profit before interest and tax in 2025 was 7%.

Today’s publications show that multiple factors combine to determine the premiums Irish households pay for car insurance. Whilst recent data suggests some stabilisation, particularly through the positive impact of the personal injury guidelines, the sector remains an important area for ongoing monitoring.

Key Findings

The data for 2025 reveals a mixed picture for motorists:

• Premium trends: Whilst year-on-year premium costs have increased, the final quarter shows an encouraging decreasing trend, mirroring patterns observed in Central Statistics Office (CSO) data.
• Claims payouts: Insurers pay out 60% of premiums received in claims. The impact of damage claim increases in recent years is particularly evident in that
• Damage claims account for 32% of premiums received.
• Injury compensation accounts for 17% of premiums received.
• Legal costs account for 9% of premiums received.
• Insurers pay out 3% of premium in reinsurance, 8% in Broker Commissions and 3% in MIBI contributions.
• Operational expenses are 22% of premiums
• Market margins and profit: The excess of premium income above underwriting expenses stands at 4%. When other sources of income are included, insurers earned a profit before interest and tax of 7%.
• Settling claims: The bulk of claims costs are still being settled through the litigated channel for injury claims even though, for claims less than €100k, the average level of compensation received from the Injuries Resolution Board is comparable. The vast bulk of damage claims and costs are settled directly.

ENDS