How effective have recent reforms been in reducing the number of road traffic injury claims and their associated costs? The Institute and Faculty of Actuaries reports there has been a slight rise in claims by 1.7% between 2013 and 2014 which is less than suggested by the portal where claims notifications are back to pre-LASPO* levels. Average costs of claims are also increasing again (by 3%). These conclusions are drawn by the Institute’s interim findings on 2014 data.
The number of claims fell by 9.9% between 2012 and 2013 which is consistent with MoJ Portal Statistics. The reduction in average costs in 2013, following the introduction of LASPO, was 15%. Understandably, however, the Institute says that the long-term effects of legal changes (such as those introduced by LASPO) remain uncertain.
The turnover of authorised personal injury claims management companies reduced from £455m in the first quarter of 2012 to £354m in the same quarter in 2013 and then to £238m in 2014. However the first quarter of 2015 saw turnover rise by 30% to £310m.
Meanwhile motor insurance premiums have risen by an average of 2% per year between 2008 and 2015. That said, the first quarter of 2015 has demonstrated a reduction of 0.5%.
Such reports will undoubtedly be watched carefully by all sides for trends and the government will want to tighten the system if it does not think it reducing costs can claims enough. At the moment the long term trends are not readily discernible. This may mean that the system will remain as it is for at least the short term.
The report is packed with further data:
- Average car mileage per year has fallen by 11% since 2003
- The total number of licensed cars has risen by 13% since 2003
- The total mileage driven in 2014 is back to the 2003 level
- Congestion has increased year on year since 2011: the average speed in 2014 was 24.1 mph
- In 2014 there was a total of 194,477 casualties as a result of road traffic accidents
- In 2014, 1775 were killed, 22,807 were seriously injured and 169,895 slightly injured
- Pedestrians, pedal cyclists and motorcyclists account for disproportionately more casualties than would be expected given the distance travelled
- Liverpool remains the claims capital of the UK with 55% of claims arising out car accidents involving damage to property of another driver also involving a claim for personal injury (the national ratio is just above 30%).
- The lowest ratio of personal injury claims to property damage claims is in Scotland (20%)
- The highest ratios are in the North East (33%) and the North West (43%)
The full report can be viewed via this link