A spate of confusing and conflicting information on road accident claims has prompted leading law firm Thompsons Solicitors to launch a quarterly tracker of the public statements of car insurers and to release details of people insurers have treated poorly.
The firm, which works only for people affected by accidents and never the insurance industry, says the government should act to ensure consumers are given reliable, independent data on accidents, claims, premiums and profits to make this captive market accountable.
In the meantime, however, the firm will publish its own ‘Thompsons Tracker’ of the car insurance market gathered from shareholder communications, media releases and other sources.
Thompsons will also publish details, with the permission of its clients, of cases where injured people have been poorly treated and had to battle for justice - starting today with the case of an elderly couple, Donald and Enid Winterbottom.
The Winterbottom’s case highlights how many insurers pass customer details – without their consent – onto law firms in order to pay as little compensation as possible.
Mr and Mrs Winterbottom were contacted the day after their accident - while Mrs Winterbottom was still in hospital recovering from her injuries - and put under pressure to use the insurer’s lawyers to pre-empt them obtaining independent advice.
“This case is so typical of the way many insurance companies are increasingly operating – passing details without the client’s knowledge or consent to a law firm who will get the best deal for the insurers rather than the victims,” said Tom Jones, Head of Policy and Public Affairs at Thompsons Solicitors.
“Insurers - and this applies throughout the insurance market not just in road traffic accidents - are endlessly portraying themselves as ‘victims of fraud’, but they have no qualms about pestering people following an accident so they can control genuine claims from start to finish and short change customers.
"Ironically the insurers’ eagerness to control the process and pay out as little as possible to genuine claimants means they don’t do as much as they should to tackle fraud.
“In the absence of effective government action to hold the insurers to account, we will continue to highlight false assertions made by them and release true examples of bad practices.”
Recent examples of confusing and conflicting information from the car insurance industry includes:
AVIVA said (23.4.14) it identified fraud on less than 1.9% of claims it received in 2013 – in contrast to the 7% figure supplied by the insurance industry to Parliament for fraudulent motor insurance claims.
Keoghs published (17.4.14) its annual Motor Fraud Index claiming to identify ‘hotspots’ for fraud and saying ‘Birmingham’s status as the UK’s biggest motor fraud hotspot has been confirmed’ by its figures. In fact, they do nothing of the sort – this index is solely Keoghs own intake of ‘suspicious’ cases referred by insurers.
Admiral told its annual general meeting (9.4.14) that that its profit from UK car insurance increased 6% to £393.9 million (2012: £372.8 million) ‘largely due to higher reserve releases that resulted from positive claims development’.
Direct Line said a statement to shareholders (3.3.14) it had increased operating profit from its motor divisions by 32.8% to £347.7 million (2012: £261.8 million) despite reducing premiums on average by 3% during 2013 as it experienced ‘positive trends in small and large bodily injury claims’.
“It seems the industry is prepared to exaggerate the problem of fraud when speaking to the public but boast about how ‘positive’ the claims environment when speaking to shareholders,” added Tom Jones.
“Motorists are required by law to purchase car insurance and they deserve to be given comprehensive and reliable information from an independent source.”
In a submission to the House of Commons Transport Select Committee on 31.1.14, Thompsons called for measures to ensure greater accountability and transparency to protect consumers, including:
- Minimum product and service standards
- Consistent disclosure of financial and trading information
- Independent information for accident victims on their legal rights