The insurer’s GI claims director explained that collaboration has trumped the traditional adversity that typically reigns within the personal injury sector

The Covid-19 pandemic has led to the “laying down of arms” within the personal injury sector, with adversity being replaced by collaboration, said Martin Milliner, general insurance claims director at insurer LV=.

Speaking as part of a panel discussion on the first day of the ABI’s virtual motor conference on 4 November, Milliner noted that he had seen “a really good set of behaviours across personal injury” where there has been “a laying down of arms”.

He continued: “The protocols and agreements reached with claimant lawyers and insurers around not suing each other during the process of lockdown is testament to the new collaboration that seems to have developed as a trend between insurers and claimant lawyers over the last few months, which is real pleasant out turn from the adversity.”

The panel discussion, which also featured Mark Shepherd, assistant director and head of general insurance at the ABI, and Jane Pocock, Copart UK’s managing director, highlighted the impact of the coronavirus pandemic on the motor insurance industry.

As an initial overview, Milliner noted that claims volumes have been picking up between Q2 and Q3.

He said: “We’ve seen obviously a reduction in Q2 of claims volumes and frequencies – approximately a 50% drop.

”But in Q3, [we are] probably running [at] around 20%, 25% reduction versus normal volumes. But that has been slightly different across a variety of headings of claim.

“We’ve seen a broadly similar experience in fire and theft claims – criminals still have to earn a living when it comes to stealing, particularly keyless entry vehicles.”

For Pocock, the pandemic will lead to permanent changes in market practices – she believes that insurers will now closely look for resilience, national coverage and technology capabilities within their supply chain partners.

She added that more cars are also entering the total loss arena (around one in three vehicles) because of the increase in repair costs and uptick in claims severity, led by speeding vehicles on quiet roads during lockdown as well as poor weather conditions.

Looking at the results achieved on Copart’s global online auction site, Pocock said that salvage returns are amounting to 40% of vehicles’ pre-accident value.

Around three-quarters of the cars being sold by Copart are easy to repair and so increasing numbers of buyers are spending their time in lockdown patching up these cars as hobby projects. The remaining quarter of vehicles sold are being broken down for use in the green parts market, Pocock explained.

Fraud opportunities

Milliner continued that the Covid-19 pandemic has also opened the door to new fraud opportunities – in particular around claims farming and impersonation.

He explained: “We have seen a higher proportion of what I term PI claims farming going on [as well as] some new and emerging threats, particularly cyber-related threats in terms of impersonation, ID theft and some very simple scams essentially, for example bogus driving jobs being posted on social media sites, which invite innocent victims to put in all of their personal details, including insurance information, which can then be used to impersonate them later – [this is] certainly a trend we need to keep a watch on.”