The Association of Consumer Support Organisations (ACSO) is calling for an immediate reduction of car insurance premiums by £35, as injury claims have taken a nosedive due to the COVID-19 lockdowns.
In a statement, ACSO cited data from the government’s Compensation Recovery Unit (CRU) that showed a significant drop in injury claims during 2020. A total of 172,000 injury claims were registered from October to December 2020, down by almost 50,000 compared to the same period in 2019. Motor injury claims, which make up the most significant proportion of claims on the database, fell to below 140,000 – a 23% year-on-year reduction.
For the entirety of 2020, the CRU reported a 47% drop in claims across all categories (motor, EL, PL and clinical negligence), from over 843,000 to over 445,000. Motor injury claims saw a 46% fall, to just below 356,000. ACSO also noted that the biggest drop in claims was in employer liability, which recorded a 60% fall year-on-year between 2019 and 2020, mainly due to the effect of the pandemic and more people working remotely.
“The picture that emerges from last year is of a hugely significant fall in all personal injury claims,” said ACSO executive director Matthew Maxwell Scott. “COVID has achieved, over the course of 12 months, what the government set out to do with its compensation reform programme.”
According to Maxwell Scott, such a significant fall in claims would be very profitable for insurers, meaning there was “no reason at all why consumers should not get their promised £35 reduction in motor insurance premiums now.”
ACSO mentioned Admiral’s £25 refund to policyholders as having shown that motor insurers have done very well out of the pandemic, and it seems fair that consumers should benefit. Maxwell Scott also noted the latest ABI statistics which showed that car insurance premiums had fallen by just 1% from 2019 to 2020, to an average premium of £465.
“Consumers should expect a much more substantial reduction in their premium than £4.65, so we urge insurers to do the right thing by Britain’s drivers and meet or beat what Admiral has done,” he said.
“The ABI estimates that the average bodily injury claim pay-out is £10,000, so, broadly speaking, motor insurers have collectively saved £29 billion in 2020 from a near 50% reduction in motor injury claims alone.”
Maxwell Scott said that, moving forward, the government should hold back on reforms to EL and PL claims, in light of the sharp drop in incidence during 2020.
“Managing such fundamental changes to the RTA regime is a major task that will consume a lot of resources for all industry stakeholders, not just our members. Even more importantly we need to learn from these changes and impact assess them once the new regime has matured to then ensure any future changes are implemented effectively,” he said.
“We argue that ministers should await the outcome of the first tranche of reforms, and have an eye to longer-term reductions in claims incidence, before ploughing ahead with planned changes to EL and PL, especially in view of the continuing pandemic and the chaos it is causing in civil justice.”
