The upcoming Whiplash Reforms, which are set to be introduced in April 2020, have been a source of discourse and contention within the insurance sector for many months now and, according to a statement released by the CII, both underwriters and claims professionals are bracing for the impact of these measures.
The measures are being introduced by the government to reform the way low-value personal injury RTA claims are handled.
The Whiplash Reforms will reduce the financial compensation for injury by setting a fixed amount payable for injuries lasting less than two years and will reduce the amount an insurer must pay in costs through the increase of the small claims track limit from £1,000 to £5,000 for RTA-related claims. The limit for employer’s liability and public liability is raised to £2,000.
The MOJ has said these reforms will “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.”
Speaking on the subject of these measures, David Williams, interim chairman of the Society of Underwriting Professionals said underwriters must make certain they are fully up to date with the changes and must work to report the savings these reforms will 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,” Williams said.
Chairman for the Society of Claims Professionals, Sue McCall added: “The headline result of this increase is that those claims valued below the new limits will no longer result in costs recovery.”
The expectation, she said, is there will be a significantly increased number of litigants in person which will bring with it the need for more time spent per case in explanation and communication.
McCall, who is also head of claims at Aspen Risk Management, stated that those working in the profession should be aware of the portal for whiplash claims being developed, which is expected to be in place by April 2020.
“We may see a surge in reported motor claims ahead of the reforms,” she said, “as we did prior to the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.”