Myclaim Market Update April 2010
New RTA costs regime to commence 30th April 2010
The new streamlined fixed costs regime for low value road traffic accident claims will begin on 30th April 2010. The new system, dealing with motor collision cases worth less than £10,000 (excluding vehicle repair costs) is based on a three stage approach and legal costs are payable at the conclusion of each stage.
Whilst the overall costs involved may be less than under the present system, the hope is that in speeding up the claim’s process lawyers acting on behalf of claimant’s will be able to recover their legal costs more quickly. If liability is not admitted or other issues arise the case can be taken out of the new system and re-enters the normal claim’s process. If the amount of compensation cannot be agreed then this will be ultimately decided by a judge either by way of submitted papers or an oral hearing.
Fortis Insurance UK to be rebranded
In part of a plan to move away from being associated with banking, Fortis Insurance UK is to be rebranded as Ageas in plans to be set before shareholders shortly. The plan is that this change will take place in the first quarter of 2011. This news follows encouraging data on the company’s premium income in recent years despite the difficult economic conditions.
Zurich to improve security
After reputedly losing some of the personal data of thousands of insurance customers and claimants, industry giant Zurich has promised to improve its information security so that it will not happen again. Despite no evidence that any of the data has been misused, Zurich has given undertakings to improve security. This will include the use of encryption techniques and monitoring of the transfer of back up data.
Yorkshire police in new initiative
In a bid to tackle speeding motorists, Yorkshire Police have devised a new scheme for those found over the speed limit by a marginal amount. Instead of having to pay fines or face court appearances, drivers found only a small amount over the speed limit will be encouraged to take part in a safety awareness course that will highlight the dangers posed by even moderate speeding.
Admiral has record profits
Admiral Insurance, famous for their adverts with the naval character boasting about their multi-car products, has recorded substantial profits which enabled them to exceed £1 billion in turnover for the first time.
The car insurance sector, at the heart of their business, produced a pre-tax profit of £206.9 million. It is likely that premiums will increase next year.
£650 million paid out due to winter weather
With over 335,000 claims last year, insurers had to pay out £650 million for claims caused by the wintry conditions in January 2010. It had been the coldest since 1987 and the eighth coldest on record. The biggest part of the payout was for vehicle damage due to slippage on frozen roads. Property damage included repairs to roofs and compensation had to be paid to business including retailers.
Buy to let property insurance : landlords winning more
Whilst the overwhelming majority of deposits are paid back to tenants, cases which are disputed are showing that landlords are being more successful at being able to hold onto the deposit under the deposit guarantee scheme. This success is apparently due to landlord’s obtaining better evidence to support their claims.
Insurance Fraud could reach £2.5 billion this year
Experian, the global information services company, has estimated that the knock on effect of the recession is likely to increase insurance fraud to £2.5 billion this year. As people strive to maintain their life styles despite unemployment and difficult economic circumstances, they are more likely to commit insurance fraud which costs the industry and other policy holders. This can include using home insurance policies to claim for goods they can no longer afford to replace.
Attempts to combat this include sharing data between firms and employing robust controls to highlight fraudulent claims.
Financial Services Bill and class actions
There is currently no direct equivalent in the UK of the class action, a type of large scale litigation available in the US. This will be a development of the Group Litigation Orders (GLOs) that are currently available in the jurisdiction, although the take up has been very low – only 69 have been drawn up since they were launched in 1999. The new rules allow for a broader approach to this type of litigation and is proposed to initially deal with the financial services sector. It is not clear whether it will proceed if there is a change of government following the election.