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    Aviva Insurance Limited is one of the UK’s leading insurance companies, part of the Aviva group with 34 million customers Worldwide. Aviva Insurance has been in the insurance business for more than 300 years.  In UK commercial, the insurance market remains challenging for insurance brokers and customers, due to the ongoing economic conditions. Aviva Insurance are focusing on improving our processes to ensure Aviva provide commercial customers with insurance cover at an acceptable price.  Insurance brokers also recognised our excellent customer service by voting us Insurance Times General Insurer of the Year in 2012, for the second year running.  youTalk-insurance sharing Aviva insurance news and video.

Two years on, whiplash is costing UK motorists £5M a day

Whiplash-motor-insurance-claims

Since George Osborne first proposed whiplash reforms in 2015 Autumn Statement:

  • £2.7bn has been paid out on 1.5 million claims for minor, short-term injuries
  • Nearly £1bn more has been paid out in legal costs - which would evaporate under reforms
  • Fraudsters committed more than 36,000 ‘crash for cash’ accidents, costing around £670m
  • Consumers blitzed with 730 million accident-related nuisance calls and texts, or 1 million/day
  • Whiplash reforms are needed to reduce pressure on motor premiums which are now at record levels due to discount rate cut and insurance tax increases

Research released by Aviva today demonstrates the financial and human cost of the UK’s current compensation culture, which has helped push motor insurance premiums to record levels and seen thousands of innocent motorists fall victim to crash for cash.

It has been two years since the 2015 Autumn Statement when then-Chancellor George Osborne proposed cutting compensation for minor, short-term injuries and removing the right for lawyers to recover their costs in low value claims.

During this time, there have been around 1.5m pay-outs for minor injuries, worth approximately £2.7bn in compensation. On top of this, lawyers have been paid nearly £1bn, a significant cost which would disappear under the proposed reforms. Motorists are therefore paying £5m for every day that the whiplash reforms are delayed.

Fraud

But there is more than money at stake, as motorists and their passengers remain at risk of injury by fraudsters who continue to pursue crash for cash. Since the 2015 Autumn Statement, fraudsters have induced more than 36,000 ‘crash for cash’ accidents - and these are just the crashes that insurers detect.

The current compensation culture has incentivised a ‘have a go’ culture – where minor accidents are exploited to secure pay-outs for minor injuries. Last year, Aviva declined one in seven third party whiplash claims for proven or suspect fraud. Aviva is committed to defending its customers where they have been wrongly accused of causing injury in an accident and has committed to trying such cases in the courts.

In the past two years, Aviva has defended its customers in around 1,200 such cases, winning three-quarters (73%) of them, including securing more than 250 findings of Fundamental Dishonesty. If a judge finds a claimant fundamentally dishonest, not only will the entire claim be dismissed, but the claimant can be ordered to pay the defendant’s costs, which can exceed £10,000. By defending its customers, Aviva is also protecting their premium, no claims discount and excess from the impact that an at-fault claim can have.

Nuisance Calls

Consumers have been bombarded with more than 730 million personal injury-related nuisance calls and texts in the last two years, according to research using Ofcom data commissioned by Aviva.  This translates to more than 1 million calls and texts made every day which solicit an injury-related compensation claim. The pending Financial Guidance and Claims Bill is expected to help reduce the number of nuisance calls. Equally, the proposed whiplash reforms – namely the removal of cash compensation for minor injuries and a cut in solicitors’ fees – are also expected to contribute to the demise of injury-related nuisance calls.

Reforms

There is a growing sense of urgency to introduce legislation dealing with minor whiplash claims and legal costs. Motor insurance premiums are at record levels, and have risen off the back of recent increases to insurance tax, the decision by the Lord Chancellor in February 2017 to cut the discount rate (which increased the cost of compensating serious injuries) and the continued high volume of low-value injury claims. The proposed reforms expected in the Civil Liability Bill represent an important change that will help to reduce pressure on premiums for motorists.

The Civil Liability Bill is expected to balance care for genuine injuries, including any financial loss they suffer as a result. Insurers will continue to pay for necessary medical treatment for minor injuries as well any loss of earnings.

Rob Townend, Aviva UK General Insurance Claims Director, said, “It’s been two years since the Government originally proposed legislation to cut fraudulent and exaggerated injury claims, hang up on nuisance calls, and stop crash for cash. We know the Government is committed to personal injury reform as it was in its manifesto and also in the Queen’s Speech.

“Thanks to strong action by the Courts and greater awareness of fraud thanks to media attention, we are beginning to see a slight reduction in the number of spurious injury claims. But as Aviva’s research shows, the cost of the UK’s compensation remains at an unacceptable level, fuelled by fraudsters, opportunists, lawyers and claims management companies and paid for by honest motorists.

“It is clear that the personal injury reforms are desperately needed to help offset the doubling of insurance tax and a cut to the discount rate which have pushed the cost of motor insurance to record levels. Aviva stands by its promise to pass on 100% of the savings from both the Financial Guidance and Claims Bill and the Civil Liability Bill as and when they come into force.”

Rob concluded, “Now is the time for Government to bring forward legislation to relieve pressure on motor premiums. We understand that the Government has had an unprecedented agenda since the end of 2015. But we don’t think it’s fair that our customers have to continue to pay for a broken system which financially incentivises opportunists and fraudsters.”

 

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