I'm interested in…

  • Strategy & Procedure
  • Motor
  • Fraud
  • Disease
  • Catastrophic Injury
  • Commercial Insurance
  • Costs
  • Liability
  • Local Authority
  • Professional Indemnity
  • Scotland

Claims volumes and cost of claims - latest portal and CRU figures

19 May 2014

The release today of the monthly Portal Company claims data for new RTA and casualty claims enables us once again to look at pointers towards future trends on both claims volumes and the cost of claims.

Monthly RTA claims volumes

In April 64,500 new claims were lodged to the portal. We had previously suggested that the post-reform average was starting to settle in the 66,000-69,000 range. This figure is clearly lower. Does it suggest that there is some evidence here of decreasing volumes?

The answer can only at this stage remain “possibly”, but we cannot yet be sure. Seasonal factors have to be taken into account. Easter fell in April this year, reducing the number of working days from 22 to 20. It’s not just a matter of doing the maths and adding 2 more days of new cases at an average of 3,225 per day to reach 71,000 though, as claimant lawyers may well have lodged those claims on other working days in the month. But the reduced number of working days will have had some effect. The same will happen in the release next month of May’s figures, as that month will as always include 2 bank holidays reducing the number of working days to 20, the same as April.

This is the latest data. The blue section of the graph shows the position pre reform, the red represents the time most directly affected by the reform, and the yellow is post-reform. The key comparison is between the yellow period and the blue.

Monthly RTA Claims Volumes

Annual RTA figures

The Portal Company uses a data collection year which ends each April, so this month’s data concludes the 4th year. The number of new RTA claims over the 12 months to the end of April 2014 was 773,000, a fall of 14% from the very untypical 2012/13 figure of 883,000 which was affected so much by the introduction of the reforms. A better comparison for the 2013/14 figure would be with the pre-reform year of 2011/12 where the annual total was 797,000. Doing that comparison, this year’s figure shows a drop of 3% from 2011/12 levels.

Future volumes

You may have heard it before, but will are still working ourselves away from a period of claims volatility, and it’s still too early to see the position that we will end up in. This month’s lower than expected figure of new RTA claims will give some support to the argument that in this type of claim they are if anything unlikely quite to reach as high as pre-reform levels.

CRU data

The recent release of the data representing new notifications to CRU for the 12 months to the end of March 2014 gives the opportunity to compare the Portal Company monthly data in order to get a longer term view. The data for certain claims types is set out in the table and graph below.

The CRU data shows an annual reduction of volumes of 3% across all types of claim when 2013/14 is compared to 2012/13. The largest type by volume is of course motor claims, which showed a reduction over the year of 6% or 46,000. The PL figure from the CRU showed a relatively stable figure, while those for EL and clinical negligence were each increased by 15%, a significantly raised level in our view. The likely reasons for these shifts in claims profile are the continued availability of hourly rate costs even for claims worth less than £25k in EL disease and in clinical negligence types of claim, unlike in motor claims where the fixed fees have not only been rolled out to £10-25k claims, but also reduced for the lower value claims under £10k.

Strategic Update - May 2014.docx

Cost of RTA claims

This month’s data shows an increase of £61 for PSLA which has increased that figure to £2,558 on average, the largest rise for 12 months. Indeed the figure has increased by 22% over the 12 month period. While a significantly raised figure, it needs of course to be set against the incoming savings on claimant costs.

Volumes of new casualty claims

There is a mixed picture this month, which in the same way as with the RTA data is affected by the shorter working month of only 20 days. The number of new EL accident claims is stable this month at 3,615, the level for EL disease is up 11% to 1,406, and for PL the number is reduced by 4% at 5,627. It’s difficult to see trends from the Portal Company numbers as the data is still immature, but there is no strong on-going monthly pattern of increase this time round.

This graph shows the stabilising number of new portal claims to the 3 combined casualty portals.

Volumes Of New Casualty Claims (1)

The longer term view can be taken from the CRU stats, that is a stable numbers of PL claims, but increasing numbers of EL claims and of disease claims in particular.

Disease volumes

Indeed it seems that while of course for CRU purposes disease claims are captured only by reference to the category of claim into which they fall (usually EL) and there is no specific EL disease sub category, other CRU data beyond that shown here suggests a 40% increase in disease CRU notifications over the 2012/13 period. This is due both to the increasing interest of claimant lawyers in securing hourly rate work on the basis that they expect most disease claims to drop out of the portal into a regime where fixed costs have not yet arrived, and to the increasing practice of insurers to report to the CRU even deafness claims where there is a less than 50dB hearing loss and where a report is not required.

Other casualty data

A total of 34 casualty claims have now had the court pack prepared at stage 3, still a limited number. 18 of those are PL, 11 are EL accident and 5 are EL disease. The level of PSLA paid in these claims is now stabilising. While the level in EL accident is up to £2,693, that for the other casualty portals is falling, to £4,802 for EL disease and to £2,659 for PL. The corresponding RTA figure is £2,558, so the two casualty accident figures are starting to settle at close to the RTA figure.

An early view can be taken of settlement levels in the 3 types of casualty claim. In EL disease its 3.5% of claims notified to date, in PL its 2.3% and in EL disease its 1.2%. All will increase over time, especially the non-disease portals.

In summary

So in conclusion putting together the data from these two sources there is a suggestion at this early stage of a slightly lower number of claims, set alongside a changed profile of claims as claimant lawyers chase harder the hourly rate work. This tactic will only be responded to by the introduction of fixed fees across all claims types below the multi-track limit, and while Government is sympathetic, this development does not look close at present. For disease claims, the position would be assisted by portal process reform which produced a more suitable process and which enabled insurers to respond to those claims effectively while retaining them in the portal.

Contact

For further information, please contact Simon Denyer, Strategic Legal Development Partner, on 0161 604 1551.

By Simon Denyer

Share your views

Please complete your details below to share your views. All comments are moderated and only your name and comment will be visible.

Your Comment

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Top