Background to the National Claims Information Database (NCID)

The Cost of Insurance Working Group

Phase 1 Motor Insurance Industry

The Cost of Insurance Working Group (CIWG) was established by the Minister for Finance in 2016, in response to volatility in the pricing of non-life insurance in Ireland – particularly motor and liability insurance. The CIWG published its Report on the Cost of Motor Insurance in January 2017, which made 33 recommendations within six broad themes:

  • Protecting the consumer
  • Improving data availability
  • Improving the personal injuries claims environment
  • Reducing costs in the claims process
  • Reducing insurance fraud and uninsured driving
  • Promoting road safety and reducing collisions

Recommendation 11 in this report required the Central Bank of Ireland (the Central Bank) to establish a National Claims Information Database (NCID), to improve data availability. Legislation was required to confer this new function on the Central Bank, and the Central Bank (National Claims Information Database) Act 2018 commenced in January 2019. After consultation with the Minister for Finance, private motor insurance was selected to be the initial class of insurance in scope of the NCID. The legislation requires that the Central Bank publish a report on a yearly basis.

A data sub-group of the CIWG (with representatives from the Department of Finance, the Personal Injuries Assessment Board (PIAB), the State Claims Agency, the Central Statistics Office (CSO), the Society of Actuaries in Ireland and the Central Bank) developed a Data Submission Requirement, specifying the data to be collected from insurers in 2019.

Objectives as referenced in CIWG Report:

  • To get reliable information on the key factors impacting the cost of motor insurance
  • Improve transparency on emerging risks within the market:
    • Understand relationship between price paid by consumers and cost to insurers
    • Identify any significant divergence over time between price and cost, and reasons for such divergence
  • Identify components in price changes e.g. medical, legal, other
  • Identify valid trends over time
  • Feed into insurers’ view of current risks; improve insurers’ ability to price more accurately and reduce cyclicality of pricing
  • Provide support to policy-making by providing on-going market data

Scope as referenced in CIWG Report:

  • All insurance undertakings operating in the State (including FOE/FOS companies);
  • Private motor car data only, based on business written in the Republic of Ireland;
  • Aggregated data only.

In the following years, the NCID data specification was developed further, with the aim of increasing the insight that can be gained into the cost of claims in private motor insurance. The Central Bank publishes the NCID Private Motor Insurance Report in an effort to improve the overall transparency of the private motor claims environment. In publishing this report, the expectation is that it will support policymaking.

Phase 2 Employer Liability Insurance and Public Liability sectors

It was proposed by Recommendation 2 of the Cost of Insurance Working Group’s (CIWG)

Report on the Cost of Employer and Public Liability Insurance (January 2018) that the Central Bank of Ireland (the Central Bank) would produce a report on the merits and feasibility of collecting employers’ liability (EL) and public liability (PL) insurance data in the National Claims Information Database.

The Central Bank, when publishing the merits and feasibility study, identified the following key conclusions:

1. There is merit in extending the scope of the NCID to include EL and PL data and it is feasible to do so.

2. Producing credible, publicly available data in relation to EL and PL insurance would be of benefit to all stakeholders in the insurance market. The data produced will relate to premiums, claims and settlement costs.

3. Liability insurance consists of a broad range of business sectors covering a variety of risks; this increases the complexity of data collection. The collection of EL and PL data needs to be an incremental undertaking. There is certain insight that will not be possible to obtain from the initial collection of this data including:

  • Trends within certain subsectors
  • Whether the cost of insurance has stopped firms taking out EL and/or PL cover
  • Comparing costs across an industry-wide definition of risk

4. A material amount of liability business is purchased as part of a formal or informal package including non-liability coverages, most notably commercial property. To obtain full insight on EL and PL therefore it would also be necessary to get an understanding of other commercial lines.

The Central Bank commenced data collection in H3 2020 and published the first Employers’ Liability, Public Liability and Commercial Property NCID report in H2 2021.