What you need to know
Having endured a number of years of significant increases in the cost of car insurance, the last couple of years have provided some respite to Irish consumers with the cost of motor cover either stabilising or falling slightly. This is indeed welcome news given that there are real doubts as to the capacity of many consumers to absorb further increases. Among both sets of consumers, there is a discernible willingness to do whatever they can to secure lower premiums, including shopping around and checking numerous price comparison sites, while many would also be open to investing in new technology or electric vehicles. However, while consumers are generally open to working with insurers to keep costs low, the recent premium hikes have clearly impacted upon consumers’ attitudes. Most consumers are dissatisfied about the level of transparency around pricing and premiums.
Issues covered in this Report
This Report analyses the private car insurance market in NI (Northern Ireland) and RoI (Republic of Ireland). This includes an analysis of the main drivers impacting upon the sector, together with an assessment of the size and direction of the market. In addition, drawing on extensive consumer research (Toluna, February 2019), this Report analyses the level of ownership of car insurance among Irish consumers, the type of insurance owned, the main providers of insurance to Irish consumers, the channels used to purchase car insurance, renewal behaviour, and general attitudes towards car insurance and car insurers.
Definitions
Motor insurance includes cover for motor vehicles, including cars, motorcycles, 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.
TPFT (Third party, fire & 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 TPFT policy. Policies may also offer additional benefits such as medical expenses and legal costs.
Other terms used in the Report include:
GWP (Gross Written Premium) – premium income accepted during the year, which is quoted gross of reinsurance ceded, but net of reinsurance accepted.
NWP (Net Written Premium) – 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.
