Whiplash reform “the next PPI unless insurers react”
Earlier in 2021, Chris Chatterton, Chief Commercial Officer (CCO) of handl Group, urged insurers to get “reform ready” in anticipation of new procedures for whiplash claims which go live from 1 June. Instead, a ‘wait and see’ approach risks causing major problems for claimants and insurers. Here, Chris explains that it’s still not too late for the industry to avoid those issues.
On 1 June, the small claims landscape in respect of road traffic accidents in England and Wales changes. In most cases, the threshold at which a claimant can get legal support with their personal injury (PI) claim will increase from £1,000 to £5,000. For claims below that limit, a new Official Injury Claim (OIC) portal will require claimants to self-apply. Compensation for whiplash will be limited. handl Group CCO Chris Chatterton sees trouble ahead.
“Here’s what will happen,” says Chris Chatterton. “On 1 June, people won’t stop having accidents. When they do, they’ll be told they need to use the new portal. They’ll look at it and think ‘I’m not doing that myself’.
“So they’ll disappear. And, initially at least, claims will drop. But those people won’t have gone for good. They’ve got two years to claim; they just haven’t worked out a minimum effort way of doing it yet. So they’ll come back later with a claims farm. And the claims farm, or ‘professional enablers’, will want their 25% so the case will become more expensive. This has the potential to be the next be PPI unless insurers react.”
Recently, handl Group carried out extensive independent research with insurers and other stakeholders about their attitudes to the reforms. “The results showed us that basically everyone knew these changes were coming – they have been for years – but the collective thinking was ‘there’s no point pre-empting this until we know what we have to do’.
“The problem is we still, as an industry, don’t have clarity on everything we’d like – and this is just weeks before go-live. The rules really don’t give a great deal of detail in terms of what needs to happen in certain situations. One of the biggest mysteries at present is that, in order to get your money in this new claims world you have to get a medical report. But it’s not clear how you get a medical report via the portal.
“So we’re currently in the rather unsatisfactory position of waiting to see the way consumers behave – and that will dictate how the industry responds.”
Inviting claims inflation and small scale fraud
At the heart of the reform of the rules has been a desire to cut insurance premiums. Chris sees the potential for that to be the outcome – but sees a risk of an alternative and much more costly outcome.
“In the old days you needed a claim worth more than £1,000. Now, although you can’t get representation unless your claim is worth £5,000, you can bring your claim yourself via the OIC portal if it’s worth £1,” Chris explains. The floor has gone. Any type of PI can be claimed - you just have to do it yourself.
“The system lets people make claims they couldn’t before. The risk is we’ll see a lot of small claims that present insurers with a dilemma: do you fight the claim, which could cost more than it’s worth, or do you settle, which leaves the door open to lots of small scale fraud? It’s a little like everyone adding a camera to their holiday insurance claim ‘because that’s what people do, right?’.
“Claims exaggeration is also going to be a problem. In the new tiered system you get more money depending on the level of injury. If you know what you’re doing, you can employ various tactics to build your case to inflate the claim. And as the financial tiers are narrowly defined that won’t be hard to do.
“Professional enablement – or gaming of the system – is going to be more of a problem.”
The post reform opportunity
Chris believes there’s an alternative to waiting for the issues to manifest. “There’s an opportunity here to engage with people who’ve been in an accident. If we can get in fast and first and talk to claimants about their problems we can stop claims getting bigger than they need to be. We can head off fraud. And we can deliver a much better service for claimants who ultimately just want their claim to be dealt with fast and fairly without having to wait months for it to be completed.”
handl Engage has been specifically developed to help insurers seize that opportunity. With a suite of 15 complementary insurance, legal and healthcare businesses, handl Group is uniquely well positioned to responding to the post-reform environment. With handl Engage, six of those companies have come together to offer a full portfolio service that directly addresses the challenges of post whiplash reform in a holistic way.
Through handl Engage, claimants are treated like customers, with claims handling that guides and supports them through a system in which they would otherwise be left to fend for themselves. Proactive rehabilitation ensures claimants feel supported and start to feel better, faster (reducing the likelihood of them seeking representation). And rapid arbitration helps insurers and claimants resolve cases within days – a vital element in ensuring disputed claims don’t become part of an enormous Small Claims Court bottleneck.
Coplus provides the concierge-style claims handling. Speed Medical brings medical reporting to the package. Cogent Hire adds credit hire services, while Cobalt offers cutting edge accident management. Corporé offers digitally enhanced physical and psychological rehab services, and Claimspace adds arbitration to the mix with leading edge alternative dispute resolution.
Chris is the first to acknowledge that other players in the market are offering a response to the change in the claims landscape, but is bullish about the holistic approach offered by handl Engage.
“We are the only people who offer a full portfolio service here,” he says. “No one has a digital rehab tool like ours. There are other arbitration platforms but no one has a digital platform like ours. In terms of litigant handling, there’s no one else out there doing bodily injury. No other service is as evolved or as comprehensive as ours.”
The starting point for the handl Engage proposition feels very different to anything else on the market too. Engage’s strapline is ‘Empowering the post-reform insurer. Engaging the post-reform claimant’.’. But Chris stresses, this is far more than a strapline.
“There are loads of organisations out there who’ll ask how badly damaged the car is. There are very few asking how badly damaged you are. Our focus on the claimant is different. We’re the only ones who will go out and talk to customers about how injured they are and offer a fast route to treatment.”
1 June is fast approaching. Chris is clear about what needs to happen next. “Insurers really need to engage,” he stresses. “We’re ready to help them.”
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