Car insurance claims drop as company profits soar

Insurance companies saw profits soar on their motor business last year, according to a report from the Central Bank.

The report on the private motor insurance sector found that the price of the average motor premium also fell.

The Central Bank report uses data from the National Claims Information Database.

There was a large decrease in average cost of claims per policy shown from 2019 to 2020.

The report states that this was "driven primarily by reduced driving activity as a result of COVID-19 related restrictions. The impact of this can be seen in both the frequency of claims and the average cost per claim in 2020".

On a quarterly basis, as at Q4 2020, the average insurance premium has decreased by 16% since its highest point in Q4 2017.

The report found that profitability was €163m across the industry last year. There was a profit margin of 12% compared to an average margin of 3% over the past decade.