Personal injury compensation claims fall by 47% – will insurance premiums follow?

The Association of Consumer Support Organisations (ACSO) has obtained interim data from the DWP’s Compensation Recovery Unit about the number of injury compensation claims registered in 2020.  It makes for interesting reading.  Newly registered personal injury claims fell 47.2% in 2020 compared to 2019.  This was a fall of 398,093, from 2019’s total of 843,426.

The reduction is obviously driven by Covid-19, and more specifically the associated lockdowns and restrictions on activity.  Fewer people on the roads leads to fewer accidents.  However, it is worth noting that the trend of falling personal injury claims has been going on for a number of years, albeit not to such dramatic levels – injury compensation claims fall between 2018 and 2019 by 3.7%.

All claim types were down last year, with a reduction in Accidents at Work of 59%, or 51,659 cases.  Road traffic accident claims reduced from 653,983 to 355,615, a huge reduction of 298,368 (46%).   The reduction in Road Traffic Accident claims alone is estimated to save the motor insurance industry £29bn – this is a huge windfall, funded by motor insurance premiums, and should be reflected in future premiums, not just in dividends to their share holders.

The good news story here is undoubtedly the near 400,000 avoided injuries and the consequential saving to NHS resources in not having to treat those injuries at a time of such huge pressure.  This has undoubtedly created capacity within the NHS to deal with the pandemic and is a demonstrable benefit of lockdown.

Not great news for the livelihoods of those who provide support to people after accidents, be they mechanics, physiotherapists, or lawyers but ultimately any reduction in the number of people being injured in avoidable accidents is something to celebrate in an otherwise bleak year.

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