In a significant reversal for the market, the number of NIHL claims fell significantly in the second half of last year. The first half of 2015 saw claim numbers that were 8% higher than the same period in 2013, when over 40,000 claims were made.

However, according to figures from the Faculty of Actuaries' UK Deafness Working Party, in the final quarter of 2015, the number of claims was 35% less than earlier in the year.

One reason for the fall is likely to be due to the reducing number of eligible claimants, which may already have reached critical mass. The conduct of claimant firms will also have had an impact. The surge in such claims was largely as a result of claims farming activities by claimant firms and claims management companies seeking to replace revenue lost by the Jackson reforms, particularly in relation to the motor market. This resulted in a significant proportion of claims being without merit and resulted in a successful repudiation rate for insurers, in the region of 80%.

It may be that NIHL claims have not been the cash-cow that claimant firms had hoped and they have simply moved their efforts elsewhere. Claimant firms appear to have reduced the volume of claims notified to insurers, instead choosing to focus on the more meritorious claims.

The possibility of sanctions may also be responsible for the declining numbers. The Information Commissioner’s Office recently fined a claims management company, Check Point Claims Ltd, £250,000 for making 17.5m automated calls in just six months; asking people if they had suffered hearing loss at work. The fine given was half the maximum that the ICO can levy under the Data Protection Act 1998.

Finally, the Civil Justice Council set up a working group in 2015 to make recommendations to the Government on improving the handling of NIHL claims. The CJC is likely to recommend a fixed costs regime should be used for such claims. Claimant firms may be taking account of these anticipated reforms in their business planning, resulting in a move away from such claims.

With an average timeframe to settlement of around two years, it will be some time before it is certain that NIHL claims numbers are reducing. However, anecdotal evidence suggests that numbers have continued to decline in 2016.

If the current trend does indeed continue, although insurers may see the proportion of genuine claims increase, given declining numbers overall, operational and administrative costs should reduce.