What you need to know
After several years of stable premiums and price competition among car insurers, Irish motorists have more recently had to adjust to dramatic increases in premiums, with insurers no longer able to sustain annual underwriting losses.
Higher premiums, together with continued growth in the number of vehicles on Irish roads, will result in an increase both in the volume and value of car insurance policies. However, even though both Irish economies have emerged from the recent recession and returned to growth, many consumers are still under financial pressure, so the general capacity on the part of consumers to absorb increased premiums cannot be taken for granted.
Issues covered in this Report
This Report examines the private motor insurance market in NI and RoI. It includes an analysis of the main market drivers impacting on the sector, as well as an assessment of the size and direction of the market. It also draws on consumer research (Toluna, January 2016) to examine ownership of car insurance among Irish motorists, the main providers of car insurance to Irish consumers, channels used to purchase insurance, renewal behaviour, and the level of ownership and potential interest among consumers in various optional add-ons to car insurance policies.
This report discusses the factors that are driving and impeding demand and supply in the car insurance market in NI and RoI.
Motor insurance includes cover for motor vehicles, including cars, motorbikes, vans, etc. This includes the following types:
Third party – covers liability for injuries to other people (including passengers), damage to other people’s property, liability of passengers for accidents caused by them, and liability arising from use of a caravan or trailer.
Third party, fire and theft – as above plus cover for fire damage and theft of vehicle.
Comprehensive – is the most popular form of motor insurance and includes protection of the policyholder’s vehicle in addition to the cover available through a third party, fire and theft policy. Policies may also offer additional benefits such as medical expenses and legal costs.
Other terms used in the report include:
Gross written premium (GWP) – premium income accepted during the year, which is quoted gross of reinsurance ceded, but net of reinsurance accepted.
Net written premium (NWP) – premium income net of reinsurance ceded but gross of commission, and excluding premium tax.
Reinsurance – the cover insurance companies can purchase to protect themselves against large losses or an unexpected aggregation of losses.
Underwriting result – the profit or loss achieved by an insurer on insurance underwriting activity, calculated as premium income less the cost of claims and the insurer’s expenses in connection with that business. It has been common for insurers to make underwriting losses since they also receive investment income, which generally offsets the underwriting loss.
