'Staggering' claims increase report could nudge rates - Allianz

The ‘staggering’ 18% increases in the proportion of third-party bodily injury motor claims revealed in an actuarial report this week could help nudge rates upwards, says Allianz Retail technical director Tom Moss.

The Institute and Faculty of Actuaries report revealed that there was also a 9% increase in the average cost of small third-party bodily injury claims between 2010 and 2011.

All of this was against a backdrop of an 11% decrease in third-party damage claim frequencies.

Moss said: “There’s a number of upward pressures on rates, and the market is still not profitable. It’s still 106 combined ratio, and lurking in the background is the possible movement of the Ogden rate. So there’s still a lot upward pressure, so it’s another one that might help momentum towards that.

“Equally, though, there’s a number of downward pressures with the Jackson Reforms next year, the OFT investigation. So it kind of swings in roundabouts.

Map of third party injury/third party damages claim numbers ratio in the UK in 2011 (red represents high ratio): Actuarial Profession

“My own view is that we are bumping along at the moment, and those upward pressures and downward pressures might just cancel each other out. We’ll probably see relatively flat premiums but more upside than downside. Maybe some modest increases.”

The report also revealed evidence of stabilisation in the average periodic payment protection (PPO) awards. The average age of PPO claimants increased only slightly from 34.4 years in 2010 to 35.2 years in 2011.