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Irish motor insurance returned to profit in 2017 after €757m of losses

 Irish insurers recorded a combined €31.1 million profit on motor coverage in 2017, after racking up €757 million of losses over the previous four years from covering drivers, according to new figures.

Insurance Ireland’s initial so-called Factfile market data for 2017, provided to The Irish Times, show that employers’ liability and public liability lines of insurance remained loss-making in 2017.

All told, non-life insurers posted a combined net underwriting profit of €126 million, delivering a combined operating ratio – costs and claims expenses as a proportion of premium income – of 95.9 per cent. A ratio below 100 per cent means insurers are writing business at a profit.

The ratio for motor coverage was 96.5 per cent, while liability insurance recorded a ratio of almost 112 per cent.

Total profits for the sector amounted to €227 million for 2017, as they were boosted by €101 million of income that companies made from their investment portfolios. Gross written premiums for 2017 came to €3.51 billion, up from €3.25 billion for the previous year, according to Insurance Ireland.

“Insurers must maintain underwriting discipline in what is still a volatile market as key claims reforms have not yet been delivered,” said Insurance Ireland chief executive Kevin Thompson. “Like all businesses, insurers want stability and claims costs reform is the means to deliver this for policyholders.”

A number of insurers – including Dublin-listed FBD, RSA Insurance Ireland and Aviva Ireland – have reported strong profits for 2018 in recent weeks.

Personal injury awards

FBD chief executive Fiona Muldoon said on February 27th that the group’s “strong” 2018 results of €50.1 million pretax profit “doesn’t help” insurers’ argument that not enough is being done in Ireland to reduce personal injury awards. However, she said the cost of insurance claims remained too high in Ireland.

Mr Justice Nicholas Kearns, former president of the High Court, said last year in his final report of the Personal Injuries Commission that the average award for whiplash was 4.4 times higher in the Republic than in the UK.

As immediate steps, Ms Muldoon said she would like to see the powers of the Personal Injuries Assessment Board (PIAB) enhanced as “too many people are bypassing it” and going to court. She also wants insurance companies to have the right to share data on potentially fraudulent and exaggerated claims.

Last month, Central Bank deputy governor Ed Sibley backed calls for new guidelines for judges on personal injury awards in order to reduce variations in court rulings and lower premiums for customers.

“Such guidelines should lead to greater levels of consistency in the assessment of general damages in Ireland, which should help in better enabling the domestic non-life insurance sector to support its customers,” he said.