The Institute and Faculty of Actuaries has released its 3rd annual report looking at "third party motor and periodic payment orders (PPOs) UK claims data"; a report which collates and analyses data from across the motor and PPO insurance industry for 2011.
A key finding of the Institute and Faculty of Actuaries report is the increase in the proportion of third party accidents involving bodily injury where data shows a staggering 18% increase from 2010 to 2011.
A rise in the proportion of reported accidents involving bodily injury has been a key trend for several years; however this year has seen the greatest increase ever. The Institute and Faculty of Actuaries believes that this rise is down to unprecedented activity by claims management companies. The increase in claims increased costs to insurers to the tune of approximately £400m in 2011.
David Brown, chairman of the Institute and Faculty of Actuaries UK third party motor and PPO claims working parties which produce the annual reports comments “The increase in costs to insurers because of the rise in bodily injury claims is likely to result in a rise in motor insurance premiums for drivers. The clear correlation between claims management companies office locations and the ‘hotspots’ for bodily injury claims suggests that the two are interlinked. We expect to see legislation coming soon which will affect the way in which claims management companies do business, which may account for the significant increase seen in 2011–it is possible this is a last hurrah.
“In 2010 the worst areas of the UK overtook the worst areas of the US in terms of the proportion of accidents involving bodily injury. It is disappointing to see this trend not only continue, but worsen in all regions with the exception of Scotland.”
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