Irish motor insurers were making large profits consistently between 1997 and 2003, according to a report published yesterday by the Irish Financial Services Regulatory Authority.

However, there was a change in this trend towards the end of the period.

The statistics show that the market expanded by 70 per cent to 1.4 million policies between the six years studied. Premium income per policy increased by 45 per cent for comprehensive cover and by over 70 per cent for third party fire and theft cover between 1997 and 2002.

Much of this increase occurred in 2002, when average premiums increased by 14 per cent for comprehensive cover and by 30 per cent for third party fire and theft cover.

The regulator states data for 2003 show a change in this trend. "Average earned premium for comprehensive cover reported an increase of just 2 per cent while third party fire and theft cover declined by 1 per cent."

The frequency of accidents continued a downward trend in 2003. In terms of comprehensive cover, the regulator said this decreased from a high of 11 accidents per 100 policies in 1997 to six accidents per 100 in 2003.

Third party fire and theft cover decreased from a high of eight accidents per 100 policies in 1999 to four accidents per 100 in 2003.

The effect of this trend was a significant decrease in claim cost per policy in 2003.

That year saw the largest decrease in average claim costs per vehicle for almost all years and both types of cover, it said.

In the context of these trends, the average surplus per policy in the industry has continued to rise. Between 2002 and 2003 the average surplus per policy grew by 14 per cent for comprehensive cover and by 17 per cent for third party fire and theft cover.

According to the regulator, the dominant player in the market in 2003 extended its market share for comprehensive cover by two percentage points to 31 per cent and by three percentage points to 25 per cent for third party fire and theft cover.

Reacting to the statistics yesterday, the Irish Insurance Federation said there have been significant reforms in the market since.