Allianz UK is overhauling its after-the-event legal protection insurance business model so it can function in a post-Jackson environment.
“That whole business model is going to be impacted by the Jackson reforms when they are implemented,” said Allianz UK chief executive Andrew Torrance.
“It is very much a work in progress at the moment but we are going to need to develop a new business model for our legal protection business that will work in the post-Jackson implementation environment.”
He added: “We have got a team tasked with doing that at the moment and they are at work.”
Torrance said Allianz is the UK’s largest ATE insurer.
Torrance also reiterated his disappointment that the first round of Jackson proposals did not contain a ban on referral fees. While he is now more optimistic about a ban following the furore around the fees that erupted this July, he contended that a ban is “not enough”.
Torrance argues that the root of the referral fee problem is the fixed fee of £1,200 that lawyers can earn from personal injury cases. This allows lawyers to be able to afford large referral incentive payments and still make a good profit margin.
Therefore, he believes efforts to combat referral fees should focus on cutting the fixed lawyer fee to between £300 and £400 rather than a legislative ban.
“One of the issues around legislation that aims to ban referral fees is that you are going to see people adjust their business models and put work-arounds into play,” Torrance said. “You are going to see the same unacceptable behaviours you see today, but they will take place under a different model. If you address that £1,200 fee you will take the wind out of referral fee activity.”
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