There has been a reduction in the number of third party motor insurance injury claims for the first time in ten years, according to a report published by the Institute and Faculty of Actuaries (IFoA).
IFoA has said that the 10% drop in claim frequencies appears to correspond with the legal changes enforced in 2013 with the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act and a reduction in claims management companies (CMC).
In 2013 the number of CMCs reduced by 35%, and data from the Ministry of Justice’s annual claims management regulation report has also shown a reduction in motor PI claims of 33%, from £354m to £238m, corresponding with IFoA’s findings.
Along with the reduction in claims, the report has also found that the number of claimants per claim decreased from 1.6 to 1.5 (a 4% drop) and that the average cost per claimant had reduced from £5,000 to £4,750.
David Brown, one of the authors of the IFoA report said that it was too early to judge what the final impact of the changes in 2013 to claims would have and that more reform, in particular in regard to whiplash, had yet to come into play.
“What is clear is that the motor insurance industry anticipated the impact of legal changes and has already passed on the reduction in costs to consumers,” he said.
He pointed to figures from the Confused.com and Towers Watson car insurance index, which had shown that there had been a 19% reduction in quoted motor insurance premiums in the year to the end of March 2014.