UK bodily injury claims costs rise for insurers

Europe

The cost of bodily injury claims to UK motor insurers has risen at 9.5% per year over the past 10 years, up a total of 840% over the past 20 years, according to the Fourth UK Bodily Injury Awards Study published by the International Underwriting Association (IUA) and the Association of British Insurers (ABI). The number of claims has also risen, an average 3% per year between 1996 and 2006, but the most concern is reserved for the escalating number of large claims. “There are now more and more very large claims emerging with the market currently handling three cases greater than £15m and one uninsured driving claim estimated at £20m”, the IUA and ABI said. The rise in costs has been attributed to legislative and legal changes – such as the reimbursement of NHS costs – but further changes on the law on damages could lead to further claims inflation in the future, the report said. Dave Matcham, chief executive of the IUA, said such increases are unsustainable while Stephen Haddrill, director general of the ABI, called for “the urgent need for reform of personal injury compensation”, adding that legal costs account for 10% of every motor premium.