A report on motor insurance from the Financial Regulator shows that the average profit made on each policy fell in 2005 compared with 2004.
Average surplus per policy for comprehensive policies fell by 23%, while the third party, fire and theft surplus dropped by 13%.
Lower premiums being paid by motorists was the main reason for falling profits, according to the report.
Comprehensive premiums were 12% lower and third part, fire and theft premiums were 10% lower.
The regulator's report (read it here) found that, in 2005, the average cost per insurance claim fell by 6% for comprehensive and 16% for third party, fire and theft.
However more accidents occured in 2005 continuing a trend which started in 2004 after sharp declines in the previous few years.
The Financial Regulator's Consumer Director, Mary O'Dea, said the results indicated that the Personal Injuries Assessment Board may be having a positive impact on the market. However its impact on costs was greater in third party, fire and theft policies, as these comprise a high proportion of personal injury related costs.
