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Top 6 UK cities with highest personal injury claims from road accidents all in the North West of England

By 12th July 2015No Comments
3 December 2015

  • 43% of road accidents in the North West result in a personal injury claim versus national average of 30%
  • conversely Scotland has lowest third party injury claims in the UK at 20%
  • direct correlation between location of Personal Injury Claims Management Companies (CMCs) and areas with highest personal injury claims.

The Institute and Faculty of Actuaries’ (IFoA) sixth annual report looking at third party injury (TPI) and third party damage (TPD) motor insurance claims shows there remains a strong correlation between the location of Claims Management Companies (CMCs) and the frequency of third party injury claims, with the top six cities in the UK for TPI claims all coming from one area – the North West.
The IFoA report collated and analysed data from 18 of the top 20 motor insurers for 2014. The report focussed on third party claims which make up 70% of all motor insurance claim costs.
The research found the top six UK cities for personal injury claims from road accidents versus third party property damage claims are from the North West of England, listed below in order.  The North West also has the highest number of CMCs.

  1. Liverpool with 55.2%
  2. Oldham with 50.3%
  3. Manchester with 49.4%
  4. Bolton with 46.8%
  5. Wigan with 46.3%
  6. Blackburn with 45.5%

The UK cities with the lowest incidence of third party injury claims were all from Scotland, which also has the lowest number of CMCs.

  1. Aberdeen with 13.8%
  2. Inverness with 14.3%
  3. Perth with 15.4%
  4. Galashiels with 17.4%
  5. Dundee with 17.7%
  6. Falkirk and Stirling with 18.7%

The report also found:

  • Reductions to third party injury claims cost have stopped completely, with a return of inflation in the second half of 2014.  This is in contrast to the significant fall (-20%) in 2013 immediately after LASPO* legislation was introduced which reduced the number and average cost of TPI claims.
  • Although the average number of claimants per claim fell by almost 3% for small TPI claims, average claims cost rose in 2014 by 1.4% after having fallen in 2013 by 5.8% after the legal reforms.
  • In the year to June 2015 the number of CMCs covering personal injury claims decreased by 16% to 934, which appears to be driven by consolidation in the industry. The same period did however see a 30% increase in their turnover, potentially associated with increased activity around accident management services.  This could adversely impact future inflation in the average cost of TPD claims.

David Brown, one of the authors of the IFoA report said:
“The IFoA report finds that the reforms the government has put in place to tackle the costs of third party motor claims driven by claims management companies had measurable impact.  The government reforms reduced both the number and cost of third party personal injury claims. However, now that the reforms are bedded in, costs are on the rise again. 
“We also see that claims management activity in the market is increasing, and not just focusing on third party personal injury claims. Third party property damage, such as damage caused to the other driver’s car, seems to be the new target.  With a 30% increase in CMC turnover in the last year, the prospects look as bleak now for property damage as they did for personal injury a few years ago.  More claims cost isn’t necessarily wrong of course.  But it can only lead to higher premiums.  And if you don’t want higher premiums, then the government’s plans to review the claims management sector in early 2016 must be welcome.  And further changes as a result of the review could protect consumers from higher premiums.
“The link between the location of the highest third party injury claims in the UK and the number of claims management companies should also be reviewed.  The government announced last week in the Autumn Statement plans to make it more difficult for people to claim compensation for exaggerated or fraudulent whiplash claims, by ending the right to cash payments and the ability for more cases to be taken to small claims court.  They expect that these changes could reduce motor insurance premiums by £40 to £50 a year.  Our analysis shows that this would be equivalent to stopping all third party injury claims under £13,000.  The measures necessary to achieve this could be quite draconian and could affect legitimate whiplash claims.”
*LASPO: Legal Aid, Sentencing and Punishment of Offenders Act (in force since 1 April 2013). LASPO introduced a number of measures that impacted TPI claims, including the banning of referral fees that were formally used to encourage claim filing and reductions to the third party legal costs which can be recovered as part of the TPI claim.
The full report is available to downloaded here.
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Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.

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