The cost of motor insurance claims varies widely across Europe, according to a report released today by Insurance Europe, the European insurance and reinsurance federation. The report found that in 2013 the average cost of motor third-party liability claims ranged from €1 200 in Portugal, to more than €5 000 in Italy and Sweden.
Bodily injury claims account for a large percentage of the total cost of motor insurance claims, and these also vary between countries. For example, average costs of bodily injury claims ranged from less than €4 500 in Estonia, Turkey and the Czech Republic to more than €20 000 in France and Greece, reflecting differences in the costs of medical treatment and in compensation practices.
It is these differences in expected claims costs, along with a range of other factors that impact the frequency and severity of car accidents, which require insurers to price premiums differently from one country to another.
Torbjörn Magnusson, vice-president of Insurance Europe, commented: “Differences in motor insurance premiums across EU member states are sometimes perceived as being inconsistent with the ideal of a single EU market. However, this diversity in premiums reflects the factors that affect claims costs. These are tied to a member state’s regulatory, socio-cultural and economic environment. Insurers must account for these factors when calculating premiums in order to build appropriate financial capacity to cover their risks.”