It has been a busy week of creating confusion and contradicting each other for the insurance industry.
First there was the revelation by E-sure that they had suffered a £14 million dip in their profits. Who was to blame? Accident victims who have the temerity to claim for compensation for injuries they have suffered because of negligent road users and personal injury solicitors who have the temerity to their jobs and represent them.
As a result, the public must pay and insurance premiums must go up. In the same week though, another insurance giant, Direct Line, have announced that they have enjoyed an increase in their profits.
What is the reason for this? Apparently, according to Direct Line, it is due to a fall in costs caused by a drop in the number of claims are being made.
The big question here has to be that, if Esure are set to hike the cost of insurance premiums due to the rising number of claims, will Direct Line go the other way and drop their premiums? After all, that would be fair.
It won’t happen of course. The fact that Direct Line are reporting a profit increase of 10% is kicking enough dirt over the recent claims from the ABI that more needs to be done to stop the alleged increase in fraudulent claims. A price drop on premiums would all but be confirming that these claims are not true.
The fact of the matter is that personal injury claims and the solicitors whose job it is to provide representation for them, are the go to be the insurers’ excuse, or justification, when the chips are down profit wise for the foreseeable future.
If it is not small road traffic accident claims they are claiming are fraudulent, it is noise induced hearing loss. Surely there has to be a time where the Government wises up to the fact that they will go to any lengths to protect their profits, even at the expense of genuine victims’ access to justice?
For the ABI, Direct Line’s news has to be embarrassing and the fact that Direct Line are not currently beating the ‘compensation culture’ drum, tells a story in itself.
Scott Rees and Co Marketing Partner, David Byrne, claims that it is time the Government woke up and saw the ABI’s campaign against personal injury and small claims for what it really is.
He said: “The claims that there is a compensation culture has long been disproved, even by the government’s own figures in the past, but now you have the insurance companies affectively contradicting their own message about the impact of small claims and the allegations that more needs to be done to stamp out fraud.”
“The restrictions on access to justice for people involved in road traffic accidents and small claim accidents are abhorrent. We were told that when the number of claims decreased we would see the premium paying motorist rewarded by the excess profits made, yet Direct Line, despite announcing a 10% profit boost, have in fact increased their premiums in recent times and have stated that they are not prepared to decrease them.”
“Instead the payout will go to the company’s shareholders as part of a big dividend, which goes completely against what was promised when the changes to legislation were made.”
“It is unfortunate that Esure have suffered such a hammering on their profits but to turn round and blame victims of personal injury and then go on to punish the premium paying motorist by increasing their prices is just wrong.”
“The frustrating thing is that the Government will continue to ignore the facts. It seems like we can never get away from this belief that we are in the middle of a “fraud crisis” or a “compensation culture” and the insurers will always have this as their trump card when their profits are hit, regardless of the truth.”
Just a couple of weeks ago the ABI claimed due to increasing pressure on premiums the Government needed to continue to impose further reform on whiplash claims and went on to welcome the announcement of a review on Claims Management Companies made by the Government in the last budget.