INTERVIEW
Clare Lunn Charlotte Parkinson, Modern Claims, spoke to the Head of Claims Crime Prevention at LV= about why she believes there is a compensation culture in the UK, cross-industry collaboration in regards to stamping out fraud, and keeping the genuine claimant in mind.
Q A
What do you believe are the key contributing factors to rising insurance premiums?
There are a number of factors over recent years that have affected premiums, the major one being average claims costs increasing, in particular in relation to repair costs. Newer cars have more sophisticated technology and the materials, such as carbon fibre, are making vehicle repair costs more expensive, and we’re seeing this throughout the industry. Although claims frequency in motor seems to be falling, the actual personal injury frequency remains stubbornly high. Insurance fraud has pushed up the cost of premiums for a number of years now, but over recent years there’s been a growing compensation culture in the UK, which we believe is being fuelled by claims management companies and claimant law firms who encourage some people into making personal injury claims. In recent years, there has been an increase in the number of severe weather events, including flash flooding in some areas of the UK, which are increasing or maintaining claims costs in the property arena. In March, the Chancellor also announced an increase in insurance premium tax (IPT). All of these facts together have pushed up the cost of insurance premiums.
Q A
How is technology – such as telematics and black boxes, helping customers in terms of the cost of their insurance?
Telematics tends to be more popular with young or inexperienced drivers, and the technology can result in cheaper car insurance as insurers can monitor their driving behaviour. It is not as popular with more experienced drivers, so we don’t see huge amounts of fitted black boxes or telematics in the middle aged and older customer base. The industry has a part to play in promoting this kind of technology to those two other customer groups, as if they use telematics, their insurance premiums could reduce. There are some other significant developments in other areas of vehicle technology, such as assisted braking and parking assist, and the industry needs to make sure that we keep up with the advantages of this kind of technology, so we can price premiums accordingly and pass on any benefits to our customers. We’re also seeing an increase in the use of dash-cameras by some drivers and these can be really useful in the event of a claim. Our customers are willing to share their footage with us in order to prove what happened on the road and the position of the vehicle. We can then utilise this in a number of ways, including to prevent fraud, where we’ve been able to see evidence the vehicle has slammed the brakes on for no apparent reason, which has helped us in court.
Q A
Do you think there is a compensation culture in the UK?
Yes, definitely. There’s a growing compensation culture in the UK, which has been present over the last few years and unfortunately there have been no signs of this reducing. When you compare the number of claims that involve whiplash type injuries in the UK, which is over 70%, compared France at 3%, there is no wonder the UK is tarred with the name Whiplash Capital of
November 2016
Although claims frequency in motor seems to be falling, the actual personal injury frequency remains stubbornly high
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