Motor insurance premiums rose by an average of 4 per cent in the first six months of 2025, more than double the rate of consumer price inflation over the same period, new figures from the Central Bank of Ireland reveal.
The average written premium per policy was €655 in the first half of 2025, according to the bank’s National Claims Information Database.
Insurance Ireland, a representative body for the Irish insurance industry, blamed the increase on rising volumes and the costs of damage-related claims, rather than injury claims.
The total cost of damage claims jumped by 8 per cent in the first six months of 2025 compared to the same period in 2024.
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Total claims costs for damages were up 155 per cent compared with the pre-Covid average, the regulator said. The sharp incline reflects the rising cost of car repairs and parts in the aftermath of the post-pandemic inflation cycle.
[ Consumers will feel impact of insurance claims cost rises most acutelyOpens in new window ]
Injury claims costs, meanwhile, dipped by 4 per cent compared with 2024 and were down 24 per cent from pre-pandemic levels. The decrease likely reflects the impact of the personal injuries guidelines of personal injury guidelines in 2021, which replaced the book of quantum.
In the first half of 2025, 85 per cent of all injury claims were settled under the guidelines, including 70 per cent of litigated claims, the Central Bank said.
Overall, the number of settled damage claims increased by almost a quarter in the first half of last year compared to the 2015 to 2019 period. Settled injury claims volumes, meanwhile, decreased by 22 per cent over the same period.
The Alliance for Insurance Reform said average motor premiums are now up almost one-fifth since 2022. The data underline the fact that higher repair costs and the increase in damage claims are “now feeding into motor premiums”, it said in a statement.
However, this is “not the whole story”, said Alliance board member Tracy Sheridan.
“Injury costs have continued to fall, the personal injuries guidelines are now applying in most claims, and motorists are entitled to ask whether those savings are being fully reflected in the price of cover,” she said.
“Repair cost inflation is real but, after years of reform and wider savings, it must not become a blank cheque for insurers.”
While the 4 per cent increase in premiums was “challenging for consumers”, the data shows that pricing remains below 2019 levels, said Moyagh Murdock, chief executive of Insurance Ireland.
She said that although the Government’s reforms are working to keep claims out of court, litigation remains the “biggest proven cost” and it takes about five years to resolve a case compared with claims dealt with by the Injuries Resolution Board.
Robert Troy, Minister of State with responsibility for financial services, welcomed the latest database figures and urged insurers to “fully reflect” reform-related savings in motor insurance premiums.
Sinn Féin finance spokesman Pearse Doherty said the figures showed the Government was allowing the insurance industry to “rip off” Irish consumers.
“The last year of data from the Central Bank makes two things clear: the cost people are paying for car insurance is going up and the cost for the insurance companies came down,” he said.
The average cost for car insurance is now €655 but the average cost to the insurance company on claims is just €310 – lower than what it was a year ago, Mr Doherty said.
