Motor insurance premiums almost halved between 2003 and 2013, according to new figures published by the Central Bank.
The data show average comprehensive and third party fire and theft premiums fell by 47 per cent and 48 per cent respectively over the 10-year period with the pace of decline stabilising in the latter years.
The figures, which have been compiled from data submitted by Insurance Ireland, an organisation that represents 95 per cent of Irish-based insurance firms, show comprehensive and third party fire and theft premiums were down by just 1 per cent between 2012 and 2013.
The biggest decline in premiums were those relating to males aged between 17 and 20 years, which dropped sharply between 2006 and 2013.
According to the figures, average costs per claim rose significantly from 2006 to 2013, jumping by 23 per cent for comprehensive cover and by 38 per cent for third party fire and theft cover.
Costs per claim accelerated dramatically from 2010 onwards with comprehensive and third party costs jumping by 32 per cent and 56 per cent respectively in the last three years covered by the Central Bank’s study.
The report shows accident frequency trended downwards for both types of motor insurance cover fell by nearly 40 per cent from 2008 to 2013.
Between 2012 and 2013 accident frequency reduced from 5.3 to 5.2 accidents for comprehensive cover and from 4.1 to 3.7 for third party fire and theft.
Notwithstanding gains made in 2012, the study shows a decline in settlement rates after 2008, with rates for comprehensive and third party cover down by 13 and 17 percentage points respectively.
Insurance Ireland warned last month that motorists can expect to be hit with premium hikes of around 25 per cent next year with car owners expected to be paying around €300 per year more for a comprehensive policy in 2016 than they did in 2013.
The insurance body has denied that mismanagement across the sector is to blame for the price rises, suggesting instead that the high cost of awards in court is a key factor driving up the cost of premiums.
Other factors cited by the organisation include legal costs, fraud and most recently, the High Court's judgment in relation to Setanta Insurance.
