Two stories from 15 & 16 June, both reported in The Daily Telegraph, may signal not only upward pressure on motor insurance premiums but also a more robust approach from insurers to claims for industrial deafness. Whether or not that condition is ‘the new whiplash’ may be beside the point. What does appear clear is that insurers are advocating tackling it using similar approaches first adopted in whiplash claims: centralised case notification, fixed legal costs and the use of MedCo for clinical reports.
On 15 June, The Telegraph reported that “The cost of car insurance is set to rise as providers struggle with a stubbornly high number of personal injury claims that now represent half of their overall claims costs, according to a major insurer”. The piece quoted data from Allianz and analysis by Deloitte, who had recently found that the UK motor insurance market’s operating ratio was around 103% on average, and set to rise to 105% next year, “forcing companies to either slash costs or raise prices.”
Interestingly, the premium increases suggested there find a very close echo in conditions in the Irish motor insurance market. The Irish financial regulator’s very latest macro-financial review, published on 16 June, says, in its non-life insurance section, that “The motor, liability and property classes of the business performed particularly poorly, with the combined ratio for each risk class in excess of 100 per cent.” The Irish Times covered this under the somewhat blunt headline “General insurance premiums set to rise”.
Also on 16 June, The Telegraph covered an ABI event on industrial deafness claims, which was branded by the association under its “Tackling the Compensation Culture” heading. [Read the ABI report ]. ABI is campaigning to reform the claims process for deafness cases and is seeking to import three key elements of change already applying to whiplash claims, ie
- requiring these cases to be centrally notified via Claims Portal Co
- introducing a regime of fixed recoverable legal costs, and
- arranging for audiology reports to be commissioned via the MedCo portal
At a high level, exporting what works for motor cases into other types of claim is a sound starting point and is how the Claims Portal model evolved in July 2013 after having been introduced in April 2010 for motor claims only.
That said, achieving the reform goals announced by ABI for deafness claims may not necessarily be straightforward: multiple defendant cases may not lend themselves easily to the current Claims Portal model and to date there is limited data on what the level of fixed legal costs might be. Furthermore, the arrangements under which MedCo currently operates in whiplash claims have been challenged by judicial review. A leading medical reporting agency was this week granted permission to proceed in a JR of the Ministry of Justice’s decision about how to allocate recommendations generated by a MedCo enquiry. The MoJ has just taken the unusual step of issuing a short summary of remarks made by a senior official at the early June meeting the MedCo board which can be viewed here.
About the Author
Alistair Kinley is BLM’s Director of Policy & Government Affairs.
Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.
He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).