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Insurance Webinar Series 2020: Market Insights & Trends in the Motor Insurance Industry

17 June 2020

© 2020 Deloitte. All rights reserved2

Insurance Webinar Series 2020: Market Insights & Trends in the Motor Insurance Industry

July 8, 2020 July 22, 2020

Today’s Speakers

Paul Connor

Director, Non-Life Insurance

Deloitte Ireland

Mark Patterson

Partner, Global General Insurance Lead

Deloitte UK

2 2 2

June 17, 2020

Life & Pensions webinar

New world, new customers, new solutions – are

insurers really in a position to

respond?

1 2

Non-life webinarNew world, new customers, new solutions – are

insurers really in a position to respond?

3 Market Insights &

Trends in the Motor Industry

Webinars

Cillian Dickson

Assistant Manager, Actuarial, Rewards and Analytics

Deloitte Ireland

Irish Insurance MarketEnvironment and Market Analysis

Paul Connor & Cillian Dickson, Deloitte17 June 2020


Irish Non Life Insurance Market

• CBI Insurance Statistics

• Central Statistics Office (CSO)

• Department of Transport, Tourism and Sport

• Road Safety Authority

• Solvency and Financial Condition Reports

• Insurance Ireland Factfiles

• Personal Injuries Assessment Board

• An Garda Síochána

• Government of Ireland (Gov.ie)

• Transport Infrastructure Ireland

Data Sources


Irish Non Life Insurance MarketMilestones

Jul 2019

Apr2020

Restrictions

Nov 2019

Dec 2019

9th progress updateHegarty vs HSE PPO

ruling

Amendments to non-life insurance renewals

NCID

Capping damages in personal injuries

Mar 2020

Jun 2020

10th progress update

Consumer insurance contracts act

Personal injuries

guideline committee

6© 2020 Deloitte. All rights reserved

Irish Non-Life Market


Source: 2012-2017 Insurance Ireland Factfile

* 2018 is a market estimate

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016 2017 2018*

GW

P (

€m

)

GW

P (

€m

)

Motor Property Liability PA/Travel Other Classes Total

-6% +3%

+8%

+14%

+8% ~2%

Gross Written Premium

Irish Non-Life Market


Source: 2013 Prior: CBI Insurance Statistics, 2014-2017 Insurance Ireland Factfile

* 2018 is a market estimate

74%

89%78%

63%71% 72%

77%83%

76%68%

9%

10%

11%

11%

12% 13%11%

11%

8%

6%

19%

17%

19%

21%

24% 22%23%

24%

18%

22%

102%

116%

108%

95%

107% 107%111%

118%

102%

96%92-95%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Claims Ratio Commission Ratio Management Expense Ratio

Irish Non-Life Insurance MarketHistorical Net Combined Operating Ratios


Irish Non-Life Insurance Market2019 Net and Gross Total Combined Operating Ratios

Combined Operating Ratio = Claims Ratio + Expense Ratio

*Aviva excluded from market average

Source: 2019 SFCRs

Market

Average*

• Net claims ratio

• Net expense ratio

• Gross claims ratio

78%71%

55% 53% 56% 55%43%

37%

61% 57% 56% 56%49% 48%

56% 54%

45%

36% 30%

30%

46%

33%42%

35%

123%

90%87%

73%

107%

89% 91% 90%


Irish Non-Life Insurance Market2019 Gross Written Premium v Net Combined Operating Ratio

AIG

Allianz

Aviva

AXA

FBD

Liberty

RSAZurich

50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 700,000

Net

CO

R

GWP

Combined Operating Ratio = Claims Ratio + Expense Ratio

Source: 2018 and 2019 SFCRs


Irish Motor Market


Net Combined Operating Ratios

Irish Motor Market

Source: 2012-2017 Insurance Ireland Factfile, CBI Insurance Statistics

* 2018 COR are market estimates

75%

87% 84%

69% 72%78%

94%99%

82%72%

5%

6% 7%

7%8%

8%

7%

8%

5%

4%

20%

17% 19%

21%23%

21%

20%

23%

17%

21%

100%

110% 110%

98%103%

107%

121%

129%

104%

97%~90%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Claims Ratio Commission Ratio Management Expense Ratio


81%

61% 64% 64% 70% 69% 63% 62%74%

58% 52% 45% 44%52%

158%

89%100%

90% 85%

66% 70% 66%

17%

24%31% 35%

33% 30%28% 29%

26%

25%26%

29%

77%

84%

51%

36%

41%

9%

41%

40% 32%25%

98%

85%

95%99%

103%99%

91% 91%

100%

83%79%

74%

121%

137%

209%

125%

141%

99%

126%

106%101%

91%

Source: 2018 and 2019 SFCRs

Average*

• Loss Ratio 2018

• Expense Ratio 2018

• Loss Ratio 2019


• Loss Ratio 2017


• Loss Ratio 2016


Irish Motor MarketNet Combined Operating Ratios


Irish Motor MarketGross written premium and new vehicles registered

Source: 2012-2017 Insurance Ireland Factfile, CBI Insurance Statistics

* 2018 GWP are market estimates

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

-

50,000

100,000

150,000

200,000

250,000

2012 2013 2014 2015 2016 2017 2018 2019

GW

P (

€m

)

No

. Veh

icle

s

New Cars Imports GWP Private vehicles GWP Commercial vehicles


€498 €508€492

€459€435 €446

€496

€602

€690 €706

€0

€100

€200

€300

€400

€500

€600

€700

€800

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Irish Private Motor MarketGEP per policy

Source: NCID

+15%

+21%

+11%

+3%

+2% -3%-7%

-5%

+2%


Irish Motor MarketAverage cost of claim per policy vs average gross earned premium per policy

• Source: NCID

€706

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

€0

€100

€200

€300

€400

€500

€600

€700

€800

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Third Party Injury Accidental Damage Fire and Theft Third Party Damage Windscreen Gross Earned Premium Claims Ratio


• Source: NCID

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Third Party Injury Accidental Damage Fire and Theft Third Party Damage Windscreen Overall claim frequency

Irish Motor MarketClaims frequency


€0

€10,000

€20,000

€30,000

€40,000

€50,000

€60,000

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Average cost of third party injury claims CPI Motor car insurance Insurance Petrol

Irish Motor MarketAverage cost of third party injury claims vs inflation

• Source: NCID, CSO, Base year =2015

% increase 2009 -2018

Average cost of 3rd party injury claim

Motor car insurance inflation

+54%

+38%


Irish Motor MarketAverage cost per injury claim based on settlement channel

• Source: NCID

88%

93%

63%

87%

93%

63%

85%

93%

66%

84%

92%

67%

9%

2%

34%

10%

3%

34%

10%

4%

32%

12%

5%

33%

3%

5%

3%

4%

4%

3%

4%

4%

2%

4%

3%

1%

€0

€10,000

€20,000

€30,000

€40,000

€50,000

€60,000

€70,000

€80,000

Direct PIAB Litigated Direct PIAB Litigated Direct PIAB Litigated Direct PIAB Litigated

2015 2016 2017 2018

Compensation Legal Other


€18,500

€19,000

€19,500

€20,000

€20,500

€21,000

€21,500

€22,000

€22,500

€23,000

€23,500

€24,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Irish Motor MarketInjuries Board – Average Motor Award

€23,234+3%

€22,454+5%

€21470+1%

€21,215-2%

€21,730+5%

€20,631+1%

€20,438-2%

€20,898-4%

€22,682-2%

Source: Injuries Board Ireland


Irish Motor MarketRoad Fatalities

Source: CSO, RSA*2020 is an estimate

15,500

16,000

16,500

17,000

17,500

18,000

18,500

19,000

19,500

0

50

100

150

200

250

300

350

400

450

500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 *2020

Kms

trav

elle

d

Fata

litie

s


Effects of Covid-19 on theIrish Motor Market


Irish Motor MarketAnnual private vehicle sales

Source: CSO

0

50,000

100,000

150,000

200,000

250,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


Irish Motor MarketRoad usage

Source: Transport Infrastructure Ireland (TII)

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