The average price of motor insurance rose 9% between 2023 and 2024 to reach €623, according to the Central Bank.
It said that the average expected cost of claims per policy increased 3% to €397, the highest it has been since 2014.
The rising costs have been criticised by the Alliance for Insurance Reform which said it is directly contributing to the cost-of-living crisis.
The Central Bank's report on the motor insurance market said the primary reason for the increase was the rise in damage claims such as repairs which reached €192 per policy while injury costs claims remained lower than pre-pandemic levels at €205.
The Central Bank said the average cost of smaller injury claims has reduced in recent years, but this has been offset by a rise in the cost of larger injury claims.
It said the cost of claims for injuries remained stable between 2022 and 2024.
Operating profit for motor insurance companies was 4% of total income in 2024 down from 8% in 2023 and 12% in 2022.
The Central Bank’s director of Economics and Statistics Robert Kelly said: "In 2024, damage claims accounted for 54% of settled claim costs, a significant increase from the 29% average observed between 2015 and 2021."
He added: "The total cost of injury claims settled in 2024 was 16% lower than the average from 2015 to 2019."
Speaking on RTÉ's Morning Ireland Chief Executive of the Alliance for Insurance Reform Brian Hanley said that vehicle repair costs were the main contributing factor to rising motor insurance costs.
"We have seen in other countries, including our nearest neighbours, increases in motor premiums and that again is due to repair costs because of supply chain issues and the cost of labour and so on," he said.
"But we have to balance that with other reforms that have come into the system as well.
"The personal injury guidelines have seen the awards stabilise and indeed bring them down more into line with other countries. Indeed, today's report shows that awards have come down by about 25% in years."
board member Ivan Cooper said: "Notwithstanding the increasing cost of vehicle repairs, injury claims account for more than half of the overall cost of settling motor claims, and we urgently need to see more claims settling at the injuries resolution board."
Insurance Ireland, the group which represents insurance companies, highlighted high legal costs.
Its chief executive Moyagh Murdock said: "The overall claims environment is being undermined by persistently high legal costs and longer litigation settlement timeframes."
She added: "In 2024, legal costs for litigated claims were 27% higher than the 2015–2019 average, with legal fees making up 48% of the total cost for claims under €100,000.
"Frustratingly, for both consumers and insurers, this offsets the benefits of lower compensation awards under the personal injuries guidelines."
