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I was delighted to see that the government is taking the rising costs for the Insurance industry seriously.
David Cameron met a delegation from the ABI, RBS, Admiral, Axa, Aviva and Zurich at Downing Street this week to talk about whiplash claims. In Britain there are 1500 whiplash claims made per day, the majority for minor incidents which costs the Insurance industry £2bn per year, adding £90 per year to the average premium. The Government states that there has been a 70% increase in injury claims over six years, with whiplash accounting for 70% of them.
The Insurance industry is facing headwinds from margin erosion due to increased competition and higher regulatory costs through Solvency II. It is not fair that the majority of honest motorists have to pay increased premiums to cover the costs of spurious whiplash claims from unscrupulous people.
The government has already pledged to ban referral fees, where personal injury details are be exchanged between lawyers, insurers and claims management businesses. My wife had a non-fault accident last year and has been plagued by unsolicited text messages ever since telling her how much compensation she could claim, despite the fact that nobody was injured at all. Clearly this serves to drive the market for claims and pushes up prices for consumers. In 2010 to 2011 there were 554,000 claims in the UK for whiplash, that’s over 10,000 per week!
Is it just me or does anybody else think the current system needs a major rethink?
Andrew McIntee is Director of Financial Services at Interim Partners
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February 20th, 2012 at 9:34 am
I agree – it is pretty much a default setting for a lot of people who seem happy to have had an (minor) accident and are very quickly trying to work out which holiday this is going to pay for. In that sense both the system and claims culture need reviewing so that the consumer understands the true cost of making a claim.