The car insurance industry here could save €287 million in reduced claims as a result of the Covid-19 crisis. That is according to a report by insurance comparison platform HelloSafe, which says Irish policyholders may be entitled to expect a discount on their premiums in the future.
The report estimates that the reduction in daily commutes and road journeys caused by two national lockdowns and various restrictions to contain the virus has resulted in a 35 per cent decrease in car insurance claims in the Republic.
This corresponds to an annual saving for insurers of €287.2 million over 2020 in comparison with 2019.
Using data from the National Claims Information Database (NCID) as well as information from individual insurance firms, HelloSafe estimated the likely reduction in claims on a national scale and on a county-by-county level.
The study found that claims have decreased most in urbanised areas.
Dublin had the largest decrease with an estimated 49.2 per cent drop for the year, equivalent to a saving of €113 million for insurers there.
Galway (-35.6 per cent), Cork (-34.5 per cent) and Limerick (-31.2 per cent) also saw big reductions in claims.
The counties of Kildare (-35 per cent), Offaly (-30 per cent ) and Laois (-29.5 per cent), which were put under local lockdowns before the whole country, also appear to have high decrease rates in car-related claims.
HelloSafe said the change in driving habits during lockdown modified the risk assumptions used by insurance companies to calculate insurance premiums. “Because of the reduction in traffic, Irish drivers were less at risk than expected during the whole year and thus represented a lower cost to insurers,” it said.
With average annual motor insurance premiums still relatively high by international standards – €653 at the end of 2019, according to NCID – policy-holders here may be entitled to expect a discount on their premiums in the long run, the company said.
"With most people stuck at home their cars have inevitably stayed in the garage," said Antoine Fruchard, insurance expert and HelloSafe chief executive.
“When the lockdown will be over and people will start going out again, the number of cars on the road is likely to increase back at pre-Covid levels,” he said. “ However, it is likely that customers will question why they continued to pay such high insurance premiums whilst they weren’t able to drive.
“It will be interesting to see if all the insurance companies will make more refunds or which other kind of discount they will offer,” Mr Fruchard said.
"Competition between them may be increasing in the coming months, and that means customers should see a slight drop in car insurance premiums – which would be fair given the economic crisis which may catch Ireland in the post-Covid world."