Whiplash-type claims have returned to near-record levels and are costing motorists £2.5bn*, which adds £93 to the average motor insurance premium of £372**.
A new report commissioned by Aviva, the UK’s largest insurer, concludes that fundamental reform is needed to reduce the number and cost of whiplash claims which will, in turn, cut the cost of motor insurance for the long term.
The UK is on track to submit more than 840,000 motor injury claims*** to the Claims Portal for the year ending April 2015, or 2,300 claims every day. This is up 9% on the previous year – or 200 extra claims per day.
Aviva analysed the motor injury claims it received in 2014 and found that 80% included whiplash, a significantly higher figure than seen in many other European countries. One of the reasons for the high number of whiplash claims is the huge financial incentives for the third parties who submit the claims. Aviva’s data shows that 96% of personal injury claims it received last year were brought by third parties such as claims management companies (CMCs), personal injury lawyers and alternative business structures (ABS). Maurice Tulloch, CEO, UK and Ireland General Insurance, Aviva said: “Last summer Aviva said that motor premiums will have ‘nowhere to go but up’ if we failed to address the excessive numbers of minor motor injury claims and the escalating costs surrounding them. We are here to help our customers when they need it, and pay genuine claims quickly. But we must address how to best treat the excessive number of fraudulent, exaggerated and minor whiplash claims which are driving up the cost of insurance.
“Sadly, we are now witnessing a resurgence in the number and cost of whiplash and soft-tissue injury claims despite some very positive developments, such as the LASPO Act, which helped reduce customer premiums. The introduction of a new system for sourcing medical reports in soft tissue injury claims (known as MedCo) is also a step forward.”