AXA Earning Increase Contests Reality of Whiplash Crisis

AXA Earnings Increase Constests Whiplash CrisisAs the legal profession prepares for yet more crippling reforms from the Government, unsurprisingly, one of the country’s leading motor insurance companies, AXA, have announced earnings growth of up to 25%. This has led to questions being raised over just how legitimate the concerns over Whiplash fraud really are.

To make matters worse, UK direct motor revenues for the insurance giant have increased by 12% to a staggering £400million This has been attributed by AXA to rate increases and an 8% increase to one million direct motor policies.

So the big question is, if the personal injury profession was suffering so badly because of an apparent whiplash fraud crisis, how are  insurance companies like AXA still coming out with such wide earnings increases? Secondly, how are these increases due to rising insurance premiums, when motor insurance premiums were supposed to be decreased in light of the introduction of the LASPO reforms?

What makes the announcement of increased profits by AXA even more tough to bear is the fact that for the second consecutive month there has been a reported decrease in the number of whiplash claims being made. In January 2016 there were 71,000 claims lodged for whiplash. That is down from 77,393 last year.

Scott Rees and Scott Rees and Co Partner David Byrne Criticises AXA earning increaseCo Partner, David Byrne (pictured), was critical in his analysis of AXA’s announcement. Responding to the figures, he urged the Government to take note and act accordingly when considering further reform to the profession.

“What recent figures display is that there has been a drop in the number of whiplash claims being made, despite us being in the middle of an alleged whiplash fraud epidemic, which, according to the insurers, is “only going to get worse”. In light of this, we have an insurance company going against what the Ministry of Justice stated prior to the introduction of LASPO, by not returning the profit gained back into motor insurance premiums.”

“AXA have been one of the most vocal campaigners for whiplash reform and cuts to the legal profession. With continuous earning increases such as these being announced, it is easy to see why.”

“The insurance profession claim to have the best interests of the honest motorist. This is their method for championing their campaign for further reform. Of course it has nothing to do with the fact that their total earnings and profits are on the rise. We agree that it is not right for the honest, premium paying motorist to foot the bill for the actions of whiplash fraudsters but we also feel that it is important not to forget the honest accident victim. It is they that will miss out on the financial support they need, and are entitled to, in order to help them recover from their injuries.”

“How is anyone, let alone the UK Government, supposed to believe the insurers when they claim they will hand back savings through motor insurance premiums if these proposals are implemented? In the aftermath of LASPO and the Jackson Reforms they are still celebrating increases in their earnings, yet insurance premiums are still on the rise.”

“The Government would be well advised to look at these figures in great detail before pursuing on the proposals they have made. Their fight should be against the fraudsters who take advantage of the legal system and should not punish innocent victims as collateral damage. They should also investigate further why insurance companies are able to enjoy increased earnings, when insurance premiums are still rising.”

Following the announcement of their increased earnings,  UK and Ireland Chief Executive of AXA, Paul Evans, said: “I am delighted that we have been able to deliver impressive revenue growth without compromising profitability.

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