This article was first published by Insurance Times

The government’s whiplash reforms being launched on May 31 have been much anticipated since they were announced in Chancellor George Osborne’s Autumn Statement almost six years ago. At the time, the announcement was welcomed by the insurance industry as a way to tackle improper behaviour in the market.

The original intention was that for there to be a premium saving for motor insurance customers, damages for minor whiplash injuries should be reduced and even removed at the lower end. The reforms that we see now don’t reflect that entirely. There has been no removal of damages, but there has, through primary legislation, been the introduction of a tariff that sets out a much reduced set of damages than would currently be applied.

The reforms expect claimants to progress whiplash claims themselves via the new Official Injury Claims (OIC) portal. The Ministry of Justice has said the process will be clear so members of the public can progress claims without legal representation, but there are still questions to be answered and much to prepare as both insurers and claimant representatives look to understand what unintended consequences the reform may bring. There is a widely held view that many claimants will continue to opt to be represented at their own cost.

Proactive intervention from both sides will be essential

Unintended consequences are an inherent danger of policy reform. The changes brought about by the Legal Aid, Sentencing and Punishment of Offenders Act and the Jackson reforms changed the balance of litigation risk for claimants. There have been significant changes in claimant representative business models ever since.

Understanding the strategies different claimant representatives use will continue to play a crucial role in the post-reform world. We’re likely to see varying types of behaviour from claimant representatives who will specialise in tackling specific injury types
with new strategies, and it’s essential for insurers to be aware of these strategies and respond to them quickly.

An emphasis on fast, proactive intervention in the claims process will mitigate risks for insurers and their customers. Acting quickly on adverse behaviours will help insurers tackle the risk of potential fraudulent claims and remain in control of the claim spend while providing the best service and care to claimants and customers.

Aligning claims, technology and legal strategy

Our claims, legal and technology specialists are working together to enable our team to react quickly to the reforms both procedurally and operationally. Our experts have played an important role in shaping our plans to help insurers stay one step ahead by bringing their claims and legal solutions together and adding technology where it adds the most value.

There are parts of the reforms that largely enable this, the perfect example being the tariff for whiplash damages, which will enable insurance firms to automate some parts of the process and harness operational efficiency.

While insurance firms are preparing for new processes and structuring operations to be ready when the portal launches, it’s clear that automation and technology will add value and drive efficiency, but understanding claimant representative strategies will continue to be key.

For more information, please contact Stacey Goodchild on stacey.goodchild@davies-group.com.