A body representing claimant interests has demanded that insurers immediately hand over savings after a year in which claim numbers plummeted.
The government’s compensation recovery unit – regarded as a reliable measure of claims trends – recorded a 47% drop in claims across the board in 2020, from 843,000 to around 445,000. Motor claims fell 46% to 356,000, while employer liability claims were down by 60% in 2020 mainly due to the effect of the pandemic and more people working remotely.
The figures were obtained by the Association of Consumer Support Organisations (ACSO) after a freedom of information request. The pattern of falling claims numbers continued towards the end of 2020, with 172,000 injury claims registered in the final quarter – a fall of 26%.
The association says the insurance industry has already achieved the fall in claims intended by the Civil Liability Act, which is not due to be implemented until May, but has yet to pass on any significant savings.
Executive direct Matthew Maxwell Scott said there is ‘no reason at all’ why consumers should not get the £35 reduction in motor insurance that was pledged as part of the rationale for reform. 'Covid has achieved over the course of 12 months what the government set out to do with its compensation reform programme,’ he said.
ACSO points out that the latest statistics from the Association of British Insurers show that car insurance premiums fell by just 1% between 2019 and 2020, to an average of £465.
While the system for RTA claims is due for an overhaul in May, with a new portal for litigants in person to make low-value claims, there also remains the possibility that the government may increase the small claims limit to £2,000 for EL and PL injury claims.
Maxwell Scott said this change should now be reassessed considering the sharp drop in claims numbers.
‘We argue that ministers should await the outcome of the first tranche of reforms, and have an eye to longer-term reductions in claims incidence, before ploughing ahead with planned changes to EL and PL, especially in view of the continuing pandemic and the chaos it is causing in civil justice.’
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