Motor injury claims reported to the Compensation Recovery Unit (CRU), the government body for recording claims, fell by almost 100,000 during 2021. The latest data show claims fell from 495,373 in 2020 to 398,051 last year, a near 20 per cent decline. The official figures, published after a Freedom of Information request from the Association of Consumer Support Organisations (ACSO), shows the 2021 full-year figures for the first time.
Between October and December 2021 alone, motor claims fell to 98,774 compared to 139,758 in 2020, a near 30 per cent drop in the final quarter of the year. Matthew Maxwell Scott, ACSO executive director, said: “From the pre-pandemic mark of 653,893 claims in 2019, the incidence of motor injury claims has plummeted by a quarter of a million since, a drop of just under 40 per cent in three years.
“That is an astonishing reduction and will have had a significant impact on the amount of injury claims costs paid out by insurers. That is why it is so disappointing that consumers have received so little benefit: the fall in claims has not been mirrored by a similar drop in the cost of car insurance, and we’re years away from being able to know whether the insurers have made good on their promise to the government to hand back £35 in premiums to motorists following the whiplash reforms.”
INDUSTRY COMMENT;
A spokesperson from the ABI said: “Current ABI figures show that the average private motor insurance premium paid is currently at its lowest in five years, as many motorists have been getting the most from a very competitive motor insurance market. This in part reflected fewer claims during lockdowns, and despite cost pressures around rising average repair costs. Throughout the pandemic, motor insurers gave added support to their customers, including in some cases adjusting premiums to reflect lower mileage.
“The industry regulator the FCA has confirmed motor insurance premiums for some new customers could rise as a result of the recent motor and home insurance pricing reforms. The FCA also acknowledged that ‘overall firms providing home and motor insurance are profitable, although there is no evidence that these profits are excessive’.”
INSURER WINDFALL?
Maxwell Scott said that a recent study from Pragmatix, the economics consultancy, found that insurers gained a windfall of £118 per policy after the fall in motor claims during the pandemic, boosting their profits by £3.3bn.
“Motorists saw just £25 in premium reductions during 2019-2020, and many commentators think prices will go up again as a result of the new FCA fairer pricing regime, which came into effect at the start of this year.
“As the cost of living soars, it is a nonsense that insurers should hold onto these excess profits without giving hard-pressed motorists a financial break, especially as the government’s own figures confirm a big drop in claims last year.”
OIC data comment
Maxwell Scott said the next set of figures from the government’s Official Injury Claim (OIC) whiplash portal are expected in early March, but it is clear that since the portal launched in May 2021, motor injury claims coming in at under 100,000 in each of the last two quarters are the lowest on record, and are only comparable to the second quarter of 2020, when the UK was in full lockdown.
“The government has succeeded in placing motor injury claims and, therefore, access to justice for this class of claim in a state of permanent lockdown,” said Maxwell Scott.
Other claims
Turning to other forms of claim, Maxwell Scott noted a significant increase in clinical negligence claims, jumping 37 per cent during 2021, from around 12,000 to 17,000 claims, which is back to the level it was in 2018, and slightly higher than immediately before the pandemic. There was a fall in employer liability claims, from circa 48,000 to 44,000 (2020-2021), and a minor fall in public liability claims during the same period, from 55,000 to 52,000.
Summary
“The major story in these numbers is the fall off in motor injury claims and the lack of response by insurers,” Maxwell Scott said, adding: “The government has undoubtedly achieved its policy aim of reducing the number of claims, but the beneficiary is the insurance industry, which has reaped £3.3bn of benefit from its customers.”
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