Bodily injury claims progress commended

29/11/2007

There has been a sharp rise in the volume of whiplash claims in the £3000-£8000 range since the publication of the third UK Bodily Injury Study according to Naeem Ali, senior consultant at EMB.

He said he was not sure whether this was the result of insurers’ more proactive approach to these claims or increased activity by claims management companies. However, he warned that this could result in a 2% hike in loss ratios for 2007.

Returning to the main findings of the Association of British Insurers/International Underwriting Association report, Mr Ali praised insurers for their work in the area of bodily injury claims and called on them to “keep up the good work”.

He added that management improvements had been “measurable” and the quicker and efficient handling of claims had been felt throughout the insurance industry.

He said: “Quicker settlements of large claims has reduced costs and may eventually lead to reduced capital requirements. It’s very much a case of keep moving in the same direction.”

Mr Ali said in 1999 about 70% of personal injury claims were identified, which had increased to about 90% by 2005.

Claim settlement times have also fallen with those over £100,000 falling to just under five years from six-and-a-half years 10 years ago.

The largest claims – those in the £1m region – had fallen to six-and-a-half years from nine years in the past.

Elsewhere, he told delegates that bodily injury inflation had fallen to 9.5% from 10% and legal costs now formed just 30% of claims. Larger claims have also increased in the market – with 12 claims over £5m growing to 19 in 2005.

He added: “Practises like the wider use of rehabilitation have been effective. Even though we haven’t been able to measure this, we believe it has had an effect.”

In terms of insurers’ release of reserves, he said that in 2006 there was a 10% net premium release of reserves, and that he would expect 7-8% in 2007 and 2-4% in 2008.

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