The UK accident claims market – a boom industry?

In the last 10-15 years, most of us have probably become aware of the increase in advertising for personal injury claims. There’s no getting away from it – the claims business is becoming big business in the UK. In some ways, that’s not surprising; the UK insurance industry is the third largest in the world and the largest in Europe. In fact, the insurance industry in Britain employs around 290,000 people on these shores. But does that explain the growth in accident compensation?

The short answer is ‘no’. In fact insurance premiums are being driven up by the increase in claims which is not necessarily something insurers want to pass on to their customers – especially once loyal ones who may be motivated to take their business elsewhere. Yet recent figures do make for particularly startling reading:

  • Estimated figures show the overall medico-legal market in the UK is currently valued at over £250m – with that figure dominated by road accident claims which make up over 75% of all claims.
  • The claims market has expanded at around 5-6% per year from 2003 onwards with that figure only looking set to rise if the trend continues to gather pace.
  • In a similar vein, personal injury claims are going up year on year and are forecast to continue growing. In line with that costs incurred by the personal injury insurance industry are predicted to rise from an already massive £8.4bn in 2010 to a whopping £9.7bn by 2014.
  • Perhaps significantly, claims for compensation arising from disease-related conditions has dropped over the same period of time.

So what does all of this tell us – that people are making claims when they shouldn’t? Not necessarily. It’s too easy to see the boom in the number of claims being made for accident and personal injury as all part of a ‘winner takes all’ culture. There are plenty of people out there who are perfectly entitled to make a claim, having suffered genuine injury due to a motor accident or accident at work.

In fact, you could say that one of the reasons for more and more motor claims is the increase in the number of cars on Britain’s roads which, statistically speaking, could account for the increased potential for accidents and thus personal injury claims. Just one theory amongst many.

What should be emphasised is that personal injury lawyers should be working with government to help shape the market for the better. That means promoting a reliable and professional approach to personal injury claims which clearly spells out what’s involved, what it may cost and whether someone should genuinely pursue a claim, resisting the temptation to do so, just because you can.