The Institute and Faculty of Actuaries (IFoA) has released its 4th annual report looking at ‘third party injury (TPI) and third party damage (TPD) UK motor insurance claims data’. The report collates and analyses data from across the motor insurance industry for 2012. This year the report included data analysis for commercial vehicles.
David Brown, one of the authors of the IFoA report said;
“The report suggested two areas worthy of further scrutiny by the motor insurance industry. Firstly, the data shows that there is a possibility that case estimates for third party damage (TPD) are weakening. Recent increases in the average settled cost of TPD claims are significantly higher than recent increases in the average incurred cost. There can be a number of reasons for such a difference and often it can go with more complex (and therefore more expensive) cases being settled fast. However there has been little change in settlement rates, which leaves the most likely explanation that claims handlers’ case estimates aren’t keeping pace with inflation. This could lead to reserving issues and we recommend that reserving actuaries review this area.
“Secondly, the number of reported TPI claims for 2010 continues to increase and is not following the pattern of previous years’ data. This is likely to be due to late ‘claims farming*’. We won’t know for some time if this is the beginning of a new pattern – or if it is simply a sudden one-off rush of activity in advance of the introduction of LASPO** measures in April of this year.”
The report also includes analysis of commercial fleet and commercial non-fleet third party TPI and TPD claims. For a full copy of the Institute and Faculty of Actuaries research into third party motor injury and damage visitwww.actuaries.org.uk.
* claims management companies retrospectively filing claims on behalf of clients
** LASPO – legal aid and sentencing punishment offenders, a package of legislation implementing many of the recommendations of the Jackson Report that was published in 2010 came into force from April 2013
The ratio of TPI/TPD is the proportion of (third party) insured accidents involving (third party) injury
For further comment, an in-depth summary of the findings of the report inclusive of charts, a full copy of the report, a jpeg image of David Brown or to answer any questions that you may have please contact the IFoA, details provided at the bottom of this page.
For all media queries please contact Sonia Sequeira, Media Relations Manager
For out of hours the Press Office can be contacted at: firstname.lastname@example.org. We aim to respond to all enquiries as quickly as possible.