A major car insurer is reviewing the future of 30 posts amidst the uncertainty of the rapidly changing claims environment.
The Gazette understands that Direct Line Group is consulting with staff on the future composition of its bodily injury claims department.
The firm stresses the move is not directly related to the announcement last month that personal injury reforms will go ahead from October 2018.
But the potential for claim numbers falling, and a tariff system which sets specific levels of damages based on the length of an injury, has reduced the need for so many staff to assess claims.
Direct Line Group says the firm will fully consult with employees and is open to suggestions about how to manage the department, with no decisions set in stone.
The insurer is the first to admit to considering cutting roles as the small claims market changes.
An insurance industry source told the Gazette other firms will be looking to offload large case numbers onto single external law firms in an effort to reduce headcount. This arrangement will see the selected firm analyse thousands of cases and help to navigate the claims portal on behalf of insured clients.
Meanwhile, legal expenses insurer ARAG has been heavily critical of the insurance industry over its response to the new discount rate for deductions from compensation payments for personal injury claims. The new rate, set at -0.75%, comes into force next Monday and insurers warn they stand to lose billions.
Tony Buss, ARAG managing director, said many of the statements put out by insurers were careful to acknowledge that accident victims should be appropriately compensated, but the Association of British Insurers’ (ABI) focus on the ‘crazy’ decision and the hike in premiums that would result, showed no apparent acknowledgement of seriously injured victims.
‘Maybe the formulae used to compensate victims are flawed and certainly the suddenness of the announcement doesn’t seem to have helped anyone,’ said Buss. ‘But the clamour to decry a decision that was made solely to make justice that little bit more just does not reflect well on our profession.
‘The people who will benefit from the discount rate reform are among the most vulnerable in our society. Children injured at birth and motorists left paralysed after an accident should now have the money to fund their care adequately, as they age.
‘By declaring the discount rate reform ‘crazy’ because it will cost motorists an extra £75, the ABI has done nothing to improve public perceptions of insurers and left the impression of an industry that may be shallow, self-interested and heartless.’
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