Chartered Insurance Institute warns industry on whiplash reforms

The Chartered Insurance Institute (CII) has advised underwriting and claims professionals to make sure they are on top of the changes heralded by the UK whiplash reforms.

Set to be introduced in April 2020, the whiplash reforms are a package of measures introduced by the government to reform the way low-value personal injury claims arising from road traffic accidents are handled.

David Williams, interim chairman of the CII’s Society of Underwriting Professionals, said underwriters must work to report the savings the changes deliver for consumers.
“With motor (insurance) pricing being a complex area, separating out the impact of just the legal changes might prove much more difficult than I think the government is expecting,” he said.

According to the Ministry of Justice the reforms will “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.”
The reforms will reduce the financial compensation for injury by setting a fixed amount payable for injuries lasting less than two years and reduce the amount an insurer must pay in costs by increasing the small claims track limit from £1,000 to £5,000 for road traffic accident related claims.

For employer’s liability and public liability, the limit is lifted to £2,000.

Sue McCall, chairman of the CII’s Society of Claims Professionals, said: “The headline result of this increase is that those claims valued below the new limits will no longer result in costs recovery.

“The expectation is that there will be a far greater number of litigants in person. This will bring with it the need for more time spent per case in explanation and communication.”
McCall, who as well as being chairman of the Society of Claims Professionals is head of claims at Aspen Risk Management, said the profession should note that a portal for whiplash claims is being developed and expected to be in place by April 2020.

She said: “We may see a surge in reported motor claims ahead of the reforms, as we did prior to the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.”