The fluctuating coronavirus landscape has created an ‘artificial environment’, making long-term motor claims trends difficult to pinpoint, says UK retail boss

“There are definitely issues” with getting claimants to use the Motor Insurers’ Bureau and Ministry of Justice’s Official Injury Claim (OIC) portal following its launch on 31 May 2021 because it has been “very complicated to implement”, according to Tara Foley, chief executive of UK retail at insurer Axa.

The much-delayed OIC portal was finally implemented earlier this year, forming a part of the first batch of changes under the Civil Liability Act – more commonly known as the whiplash reforms.

The portal has been designed to empower litigants in person to progress their own whiplash injury claims online following a road traffic accident, with compensation awards based on injury recovery times as specified by a new tariff table.

The portal has taken its time in coming to market, however. Originally scheduled for an April 2020 launch, the Covid-19 pandemic saw the implementation deadline move to August 2020, then April 2021 and – finally – May 2021.

Despite describing the portal and the whiplash reforms as “fantastic” and “the right thing to do”, Foley added that “it’s very complicated to implement, so by the time this has come to the market, there are definitely issues”.

On the flip side, however, she noted that it is still “so early” following the portal’s launch that “it’s difficult to make a call” on its success so far.

In her mind, more time is needed to gauge how the motor insurance market has reacted to the industry-steered changes.

She explained: “We’ve used it, obviously, but we haven’t got a significant volume through there yet because remember, it’s gone live in the pandemic, in an environment where there are lower claims volumes anyway, so it’s more difficult to test this.

“I’m very interested to see in six months’ time [how] various organisations have adapted to this and still managed to go back to the status quo but using different terminology for it.

“This is what we’re all looking at and all observing and keeping a close eye on – as the regulator is also. We’ll keep focused on that.”

Mitigating fraud

One aim of the OIC portal is to deter fraud, however there have been industry-wide concerns about ‘gaming the system’, so to speak – this could include, for example, claims management companies or law firms encouraging claimants to add extra injuries to their whiplash claims to increase their compensation potential.

Foley is relying on a new hire at Axa to help mitigate this.

In April 2021, the insurer appointed Anna Fleming as retail chief operating officer. Fleming, who trained as a solicitor, worked in key claims roles at Zurich - including chief claims officer - between 2008 and 2017 before joining the Motor Insurers’ Bureau (MIB) as chief operating officer in September 2017.

Foley said: “The person who has been very involved in implementing [the OIC portal] at [the] MIB has now joined my team as the [chief operating officer], so she has great insight on this and it’s really helpful for us.

“She’s got lots of views on how it can be manipulated so she will be able to spot those things happening if they do.

“Nothing is ever fool proof. You have to rely on a degree of trust and we’ll just have to see how this progresses.”

‘Unprecedented’ pricing

For Foley, there has been an “unprecedented amount of movement in pricing in the retail space, particularly in motor”.

In part, this has been triggered by insurers such as Axa passing on premium discounts to policyholders who weren’t driving – or making claims – as much during the national lockdowns.

A further driver has been “the FCA price ruling and organisations taking the opportunity to build their books prior to the implementation coming in” at the end of the year.

“It is a very dynamic market at the moment and whilst we have expected that to potentially have settled at this point, it’s still moving so it’s something we’re very alive to,” Foley continued.

Trend trepidation

Motor insurance pricing is naturally connected to claims arising from road traffic accidents – peaks and troughs over the last year, however, have also been linked to whether the UK has been in lockdown or not, as this has dictated the number of drivers out on the roads.

Foley believes that car usage “came back a lot faster than people were expecting” – even before ‘Freedom Day’ on 19 July – this is now back to “90%, 95%” of normal levels, she said.

“There could be a lot of reasons for this,” she explained. “It could be that people are reluctant to use public transport, so for any journey, they’re using their car.

“The data is saying that their journeys are shorter, so it might suggest school runs, etc – we know that the school buses [haven’t been running] because of the bubbles, because of the way the schools have had to construct themselves, it’s been very difficult for children to get to school without being accompanied by a parent.”

Foley emphasised that predicting future motor claims trend is “difficult to call” because “what we’re seeing right now is an artificial environment so you can’t really predict long-term trends from it”.

She continued: “It’s something we have to keep a watching brief on. All we can do is monitor very closely.

“We have an obligation and a responsibility to really be all over events as they’re occurring and try and derive what we can to forecast out, but what you’re seeing now I don’t think is a normalised environment, so we can’t really predict trends from it.”

Despite this caveat, Axa’s “current view is [claims] could potentially be 5% lower than pre-Covid”, Foley added.