A report by the motor insurance working party, due to be published later this year will highlight a rise in third party car accident injury claims.
Mr. Brown, the Chair of the working party stated: “What is clear, is that the growing number of claims management companies are at the heart of it [an increase in injury claims].
Mr. Brown added: “The working party has only done limited research on why there has been such an increase. Claims Management companies are driving people to claim who would not have considered claiming before – not just leading to more claims but to more expensive claims (with more than one claimant on each claim). Claims management companies are also involving lawyers before a claim is made. When legal costs are a major component of bodily injury costs, this is a significant driver of inflation.”
However, much of the information to be relied on in the report is still being analyzed.
The working party said it has already identified that while settlement rates for third party injury claims across the industry are speeding up, personal injury settlement amounts are increasing.
The chair of the working party, said the number of accidents involving personal injury has been growing consistently since 2007 at about 9% per year. He expressed concern about the average costs of third party injury claims. Mr Brown said the average claims costs have always increased year on year. He said that the industry is settling larger claims slightly faster and this may be driving some of the headline increase. With both numbers and average costs up, he said the cost of settling injury claims is now growing by 30% each year.