Insurer aims for £1m saving with new evaluation system

Allianz Cornhill is aiming to shave £1m off third party legal costs with the launch in January of a claims handling mechanism for whiplash claims.

The insurer plans to train specialist claims handlers to evaluate whiplash cases in-house, removing the need for claimants to use external legal experts and consequently reducing associated legal costs.

Pilot programmes have been operating in Leeds and Milton Keynes since June.

Routine whiplash claims cost Allianz Cornhill an estimated £50m each year, half of which, the company said, resulted from legal costs.

Bob Rabbitts, technical claims manager at Allianz Cornhill, said the programme was one of two processes it would introduce from 30 January to reduce the company's legal costs and detect fraudulent claims.

Rabbitts said: "We will guarantee that the customer receives the same level of compensation but by handling it ourselves, we can substantially reduce associated legal costs by £1m a year."

He added: "Valid claims will be handled directly by the company, allowing the customer access to a medical examination and medical reports. However, at any time during the process, the client is allowed to seek a private assessment and legal advice and the legal costs will be covered as part of the claim."

Rabbitts said the company also planned to tackle fraudsters by training claims handlers to investigate whiplash claims where it believed the speed of the vehicle at impact was insufficient to cause significant injury.

He said: "Claims will be measured against fraud indicators and investigated by our claims handlers.

"Claims that fail will be dismissed and where the company believes the policyholder is a credible witness, defended in court."

A pilot project had revealed that 10% of whiplash claims were fraudulent, the insurer said.