Despite a reduction in the number of motor traffic accidents on UK roads, personal injury claims are increasing. This could result in higher car insurance
prices, placing a greater financial burden on UK motorists.
Figures released from The Actuarial Profession have shown that despite a reduction in road traffic accidents of 11%, personal injury claims have increased by 18%. Personal injury claims from traffic accidents alone are costing the insurance sector an additional £400 million per year.
UK motorists may need to brace themselves for yet more motoring expense. The upward trend in personal injury claims is likely to have a negative impact on insurance premiums as the additional cost is passed on. The figures that The Actuarial Profession has released show a year on year increase in personal injury claims from 2010 – 2011, with 2011 having the highest recorded number of claims to date.
The Actuarial Profession report
also revealed a correlation between increases in personal injury claims and the emergence of more claims management companies. David Brown, Chairman of the Institute commented: “This continuing rise in personal injury claims seems, yet again, to coincide with the growth of claims management companies. Over the period 2010 - 2011, the number of claims management companies in England and Wales increased by 20%, most notably in known accident and claims “hotspots”. And where there is a notable increase in claims management company activity in an area, there is a corresponding increase in personal injury claims.”
The reduction in road traffic accidents can be mainly attributed to lower road use in general. The report contains data that shows a sharp reduction in road use in 2010 which has a direct correlation to the noticeable increase in fuel price at around the same date.
The Government have plans to restrict the amount of money that claims management companies can make from “no win, no fee” cases. With this legislation expected soon, the sharp rise in personal injury claims in 2011 could be a response to this.
Andrew Goulborn, Commercial Director of Tiger.co.uk, commented: “This report has identified some interesting statistics with regards to the personal injury industry. There certainly appears to be a divide between accidents and personal injury claims and the ripple effect of this could have a negative effect on motor insurance prices. If the planned Government legislation is introduced then this could help, but in the meantime it’s even more important to compare car insurance
prices from a variety of insurers to make sure you get the best deal available. ”