Central Bank report shows reforms are reducing liability claim costs – why are insurers not passing on the savings?

• Claims are down, costs are down and compensation for the vast majority of claims has fallen — why are insurers not passing on the savings? 

• With average legal costs now exceeding average awards in a majority of claims in litigation, the Government needs to take further action to ensure that many more suitable claims are concluded through the Injuries Resolution Board.

The latest NCID liability report from the Central Bank makes clear that the reforms introduced in recent years are continuing to reduce the cost of liability claims. The question now is why businesses, sports clubs, community groups and voluntary organisations are still not seeing those savings reflected in the cost of cover.

Today’s report shows that the cost of settling injury claims in H1 2025 was €9 million lower than the pre-Covid average (2015-2019). The volume of settled claims was also down 13% for the same period. For claims settled for less than €150,000, which account for the vast majority of cases, average compensation cost is now 17% lower than in 2020.

These are the kind of savings the Government’s insurance reform programme was intended to deliver. At a time when organisations across the country are under significant cost pressure, it is unjust and unacceptable that insurers continue to benefit from lower claims costs while policyholders are still waiting to see meaningful relief in the cost of their cover.

The report also shows that Government needs to take further action to ensure that many more suitable claims are concluded through the Injuries Resolution Board, rather than progressing into litigation where average legal costs now exceed average awards for a majority of claims (under €150k). 

Commenting on today’s report, Lucy Medlycott, Alliance board member and Executive Director of ISACS Network, said:

“This report shows that the reforms introduced in recent years are working. Claims volumes are down, claim costs are down and compensation levels for the great majority of claims have reduced. Policyholders are entitled to expect that those savings would be reflected in the cost of insurance. Instead, insurers continue to make very strong profits while businesses, sports clubs, community organisations and voluntary groups remain under real pressure. At a time of significant economic strain, that is unjust and unacceptable.”

Ms Medlycott added:

“The report also shows that Government needs to take further steps to ensure that many more suitable claims are concluded through the Injuries Resolution Board rather than through litigation – awards are the same and claims are resolved in half the time. The question for Government is why so many cases are still ending up in litigation and what further steps are needed to change that.”

-ENDS-

FOR FURTHER INFORMATION CONTACT:
contact@insurancereform.ie or Alliance CEO, Brian Hanley at 086 8620 974.

Notes to Editor:

1. Data below is from the Central Bank’s Employers’ Liability and Public Liability Insurance Mid-Year 2025 Data Release, published on 10 April 2026.
2. Claims under €150,000 account for the great bulk of the market: 93% of claimants across all channels and 89% of litigated claimants settled for less than €150,000.
3. For claims under €150,000, average settlement time was 2.2 years through the Injuries Resolution Board and 5.8 years in litigation. Average legal costs for litigated claims in that cohort were €25,157, compared with average compensation of €24,379, meaning legal costs now exceed awards in the litigation channel for the majority of claims. The same data also shows that awards are comparable between the IRB and litigation channels, with average compensation of €26,215 through the IRB and €24,379 in litigation.
4. The Central Bank’s annual NCID liability reports show profit after tax of 10% in 2021, 14% in 2022, 13% in 2023 and 10% in 2024. By way of context, a 5% underwriting margin is often treated internationally as a reasonable benchmark for sustainable non-life underwriting profitability. In contrast, the same NCID reports show that the average earned premium for package policies was 23% higher in 2024 than in 2020. The Central Bank describes that premium metric as the best available indicator of overall average premiums from the data captured.
5. The Alliance for Insurance Reform brings together 47 civic and business organisations from across Ireland, representing over 55,000 members, 700,000 employees, 614,000 volunteers and 374,000 students in highlighting the negative impact of persistently high premiums and calling for real reforms that will quickly reduce liability and motor insurance premiums to affordable levels and keep them that way.