Some useful analysis of market trends here from Angelica Solutions;
A fundamental shift in who is being seriously injured on the roads could become the next structural challenge facing motor insurers reveals fresh analysis from Angelica Solutions.
While successive legal reforms have helped reduce the frequency and cost of lower value motor injury claims over the past decade, the latest analysis suggests the changing profile of road casualties may create a new source of claims inflation, particularly for the industry’s most severe and costly claims.
Angelica Solutions analysed police STATS19 road collision data and found that although casualties among drivers and passengers have fallen by 46% since 2010, vulnerable road users have seen only a 16% reduction over the same period.
As a result, vulnerable road users now account for around four in every ten casualties on England’s roads and represent 57% of all people killed or seriously injured (KSI), highlighting how road safety improvements have increasingly benefited people travelling inside vehicles more than those outside them.
Against this backdrop, Government plans to increase levels of walking, wheeling and cycling through its £4.5 billion Investment Strategy could further accelerate this changing casualty mix unless there is a step change in how effectively vulnerable road users are protected.
To understand the potential insurance impact, Angelica Solutions modelled a scenario in which walking and cycling increased by 60%, while today’s injury rates remained unchanged. The analysis suggests this could increase the number of pedestrians and cyclists killed or seriously injured by around 22%, leading to an estimated 18% rise in third-party injury costs and increasing overall motor claims cost by approximately 6%
The analysis assumes that the greatest impact would fall within the large claims layer, where catastrophic injury claims involving lifelong care, rehabilitation and future loss of earnings are concentrated.
Sarah Vaughan, Director of Angelica Solutions, comments: “Over the past decade the motor market has successfully adapted to major legal reforms including the Whiplash Reform Programme, changes to the Small Claims Track and revisions to the Ogden Discount Rate. Those changes have fundamentally reshaped motor injury claims, the former particularly affecting lower value claims”.
However, the analysis suggests the next structural challenge may come from somewhere quite different as roads are becoming safer at different speeds depending on the mode of travel. Advances in vehicle safety have dramatically improved protection for drivers and passengers, but vulnerable road users have not benefited to the same extent.
“The casualty mix is changing as pedestrians, cyclists and motorcyclists are disproportionately represented in the most serious injury claims, meaning a growing share of insurers’ overall claims spend is likely to be concentrated in complex, high-value losses”, confirms Sarah Vaughan.
“As Government policies encourage more active travel, insurers have an opportunity to look beyond simply pricing this changing risk and instead help shape how it is managed.”
“Better collision data, richer claims analytics and more targeted road safety interventions can help reduce serious injuries before they become catastrophic claims. Protecting vulnerable road users is not only a public policy objective, but it also helps preserve many of the hard-won improvements the insurance market has achieved over the past decade.”
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