Access to Justice has called out the Association of British Insurers over its defence of motor premium rises in the face of falling whiplash claims.
In responce to Post’s article yesterday in which the ABI rejected claims that insurers were “profiteering” over savings on personal injury claims, lawyers took to twitter to refute the points made by the group.
Access to Justice’s Andrew Twambley told Post: “The ABI’s James Dalton is a master of the Boris Johnson cake strategy: he wants to have his cake and eat it too.
“Insurers have come under scrutiny in recent weeks for a number of near-the-knuckle practices, including auto-renewals, under-settlement of claims, hiking premiums for non-fault customers, or indeed hiking premiums generally.
“If whiplash claims are falling, why is Mr Dalton not pointing this out? Perhaps because the statistics do not fit his preferred narrative, which is to persuade the government and anyone else who listens that high premiums are the fault of the so-called compensation culture.”
James Dalton, ABI director general insurance policy, responded by tellingPost that although whiplash claims have been falling, the latest Compensation Recovery Unit data shows that there has been a rise in soft tissue, neck and back injury claims. He claimed that overall this year these and whiplash claims combined stand at 771,274 compared to 762,337 for last year.
“The claimant legal lobby are never ones to let cold, hard facts get in the way of their spin. So here are the facts,” Dalton said. “Claimant lawyers calling a whiplash claim a back injury doesn’t mean overall claims are reducing.
“Fact: Insurers operate in the glare of political, regulatory, media and consumer scrutiny 24 hours a day. As an industry, we know that we have to improve consumer trust. We are increasingly transparent, including by publishing premium trackers, average pay-out rates and average claims amounts.
“Yet I’ve seen nothing similar from claimant lawyers looking to improve things for their clients. I wonder whether they have their heads in the sand or whether they actually recognise that their reputation with the public is no better as an industry than ours.
“Fact: Insurers remain committed to ensuring that genuine claimants receive the compensation they are entitled to quickly and efficiently. It is for society to decide if compensation levels for whiplash are too high.
“The Chancellor announced last November that, in the government’s view, people should not be entitled to claim general damages for whiplash claims and should pay lower car insurance premiums as a result.
“Insurers support this reform. Is it any surprise that claimant lawyers want to protect their own bloated legal fees and therefore oppose these reforms?”
Twambley responded: “They convinced George Osborne, ‘if you ban whiplash, we’ll reduce premiums by fifty quid.’ If you accept their argument that all these different things dictate prices, then that’s disingenuous of them when you look back at the original statement they convinced the government on.
“So I’m sure they didn’t tell George Osborne that in those cozy little chats when they convinced him to raise this subject in his Autumn Statement.
“Of course, Mr Dalton has his job to do, which is to defend his industry, but instead of attacking ordinary people seeking redress for injuries which are not their fault, why doesn’t he explain what insurers are actually doing resolve the practices they have been criticised for?
“After all, it was left to the FCA to make the insurers change their policy towards auto-renewals. It was the FCA who urged insurers to think harder about their treatment of the elderly and other vulnerable groups when it came to renewals and pricing policy.
“What have the insurers actually done themselves – without waiting for the FCA to tell them what to do – to improve life for the customer?
“The industry cannot admit that some the problems it faces – certainly where motor claims and the broader personal injury sector are concerned – are of its own making.
“Many of those problems, being created by insurers, can only be fixed by insurers. So isn’t it time the insurance industry gave poor Mr Dalton and the ABI a break and did some fixing?
“Compensation culture’s a myth. It’s a great soundbite for the Daily Mail isn’t it? ‘Compo culture’. It’s been trotted out as many times as they can.Even the government said themselves several years ago that there’s no compensation culture. It’s a great soundbite and it sounds sexy, but it’s a bit like batman. It doesn’t really exist. It’s fictional.”
Dalton told Post that car insurance premiums are based on the costs car insurers incur. He explained that when costs go up, so do premiums. He claimed that claims volumes are up, average claims costs are up and that the Insurance Premium Tax has been increased twice in the last year.
“So average car insurance premiums are increasing,” he said. “There’s nothing secret here – indeed our own, transparent Motor Premium tracker shows this to be the case.
“Claimant lawyers, along with credit hire companies, claims management companies and dodgy doctors have consistently either resisted attempts to improve the system for everyone or actively undermined initiatives to do so.
“Look at their resistance to disclosing the source of their referral on the Claims Notification Form submitted in the Portal or how MedCo has been thwarted since the get go. Is it any wonder the Government has opted for bolder reform?
“Fact: Reputable claimant lawyers want to work with the insurance industry to improve the claims system overall for the benefit of customers and by stamping out fraud.There’s plenty that insurers and claimant lawyers disagree on which makes it all the more important to focus on the areas where we agree the system can be improved.
“Fact: I’ve not heard of the Boris Johnson cake strategy. But I do like cake.”