I am encountering growing problems on "rule based' commercial policies where liability claims estimates are added to the experience as soon as claims are submitted.

Clearly, this has always happened, but now the computer is factoring in the amounts to calculate renewal premiums without much "human" authority to do anything about it.

I have recently had two renewals with spurious EL claims outstanding, which produced 100% increases in premium.

In the fullness of time neither claim will succeed, leaving the premiums artificially high plus costs against the claim for defence of the matter.

In a legal sense, the policyholder is considered guilty while proving his innocence and, of course, insurers have been tempted to make offers "out of court" to save in the long run, rather than defend the claim.

It struck me, therefore, that when the industry is talking to the relevant government departments regarding liability insurance, it may suggest that, in civil matters, where claims are submitted to insurers, rather than being prepared in court, solicitors accepting the cases should have a duty to prepare the case as if it were going to court prior to any submission by insurers.

A new protocol should require proof in respect of the legitimacy of the claimant and his loss.

This should alleviate the spurious claimants at source thus solving the "estimate" problem and extend a greater degree of required diligence on the compensation industry as a whole.

We may also see a reversal in the "blame and claim" attitude among the public which can only assist our beleaguered industry.

S M Scott
Woodside Insurance Services

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