The effect of the introduction of the small claims track limit of £5,000 for motor claims has been to shift a significant proportion of claims away from the RTA Protocol and the MOJ Portal and into the RTA Small Claims Protocol and the OIC Portal. Despite this, controlling indemnity spend in the MOJ Portal should remain a key focus for insurers.
Keoghs insurer benchmarking data suggests the split between the two claims servicing portals is around 70–80% in favour of the OIC Portal, so it is not surprising that the focus of low-value motor injury claims has centred on claims valued within the small claims track limit. Indeed, the attention that the OIC Portal (OICP) has received has been accentuated by market messaging about delayed settlements due to system and functionality teething problems, questions around access to justice for genuinely injured claimants and, of course, judicial intervention in how to value claims where there are concurrent whiplash and non-whiplash injuries, which will now eventually be decided by the Supreme Court. However, Part 1 of the Civil Liability Act 2018 also applies to in-scope whiplash claims for servicing in the sibling MOJ Portal (MOJP), so what have been the impact and consequences of the whiplash reforms on the MOJP over the last 24 months?
Pre whiplash reforms claims still dominate the MOJP, as evidenced by our insurer benchmarking data, as they work their way through the submission stages to settlement. The proportion of claims to be burnt down by insurers varies from 60 –80% of all the claims submission volume such that the effect of the reforms on indemnity spend remains diluted by these legacy claims. Average general damages paid are increasing, which is to be expected, accounting for injury claims values above the small claims track limit of £5,000 and being, therefore, out of scope by value for the OICP. What is not clear, however, is the picture around frequency of claims submission and a deteriorating position on claims severity.
Can the official Claims Portal management data provide any insights into these variables in order to draw any preliminary conclusions? The fact that the data shows that average general damages for pain, suffering and loss of amenity is now tipping over £5,000 and likely to trend upwards to £5,500 over the next few months is unsurprising for the reasons discussed above. Moreover, monthly claims notification submissions appear to be stabilising at around £7,000 on a rolling twelve-month basis and monthly settlement volumes (the MOJP has not been beset by the delayed medicals picture in the OICP) averaged around £1,100 for the first three months of this year and appears to be steady.
However, what is less certain is the indemnity spend position for post whiplash reforms claims presented in the MOJP with accident dates from 31 May 2021, some of which will consist of or include a claim for whiplash. Even by stripping out the pre whiplash reforms settled claims the indemnity spend picture is far from clear. Again, when this exercise is carried out, Keoghs insurer benchmarking data is not yet evidencing any consistent data picture on indemnity spend with average values for general damages paid for pain, suffering and loss of amenity ranging from just over £2,000 to £4,000. Of course, the claims profiles evidencing these average payments are not just those for whiplash injuries as other non-whiplash injuries sustained by, for instance, vulnerable road users, need to be factored in. Additionally, settlement volumes are low but it is anticipated that a more consistent pattern of indemnity spend will be available by the end of this calendar year.
Has the Court of Appeal judgment in the test cases of Rabot and Briggs affected claims servicing in the MOJP? The answer so far is not really, as the expected deterioration in the OICP through disclosure of delayed medical reports for settlement leading to claims leapfrogging to the MOJP has not really transpired. This scenario is being closely monitored by insurers and Keoghs through our insurer benchmarking data as there remains a significant proportion of medical reports still undisclosed on the OICP, but any ongoing impact on indemnity spend in the MOJP may not be that significant. What our data is showing for MOJP claims that consist of, or include a whiplash injury is that the overall presentation rate of mixed injury claims profiles (whiplash and non-whiplash injuries) is on an upward trend and tracking at 60% and higher as against the overall claims submission rate. This increasing severity picture is more reliable because it is taken from the injuries clinically reported in the expert medical report and not the claims notification. Additionally, the underlying severity picture in respect of prognoses also appears to be increasing, with Keoghs data demonstrating average whiplash recovery periods between six and seven months and average non-whiplash injury recovery periods tipping over three months and up to four months. This underlying severity picture in the MOJP will require ongoing monitoring in respect of overall indemnity spend for those claims that have both whiplash and non-whiplash injury profiles.
What about the impact of post whiplash reforms rule changes on RTA Protocol and MOJP claims servicing? Where the claim includes or consists of a whiplash injury, the same requirements remain for obtaining further medical reports that are justified in that it must be recommended in the first expert’s report, further time is required before a prognosis of the claimant’s injuries can be determined, and there is receipt of continuing treatment or the claimant has not recovered as expected in the original prognosis. Nevertheless, in order to mirror the provisions of the RTA Small Claims Protocol there is no requirement for the initial medical report to be disclosed first in respect of claims emanating from accidents on or after 31 May 2021. This is an important rule addition as it may promote the incubation of claims where the value is likely to exceed £25,000 and in some cases significantly in the MOJP before exiting to the multi-track, thus denying insurers a sightline on severity, claims routing, and forcing them into an evidential catch-up. MOJP claims incubation is nothing new and insurers, often with our assistance, already deploy mature containment models through incremental markers requesting evidential updates on the claim.
It is likely to be the turn of the year before data analytics will be able to reach any firm conclusions about indemnity spend in the MOJP consequent to the whiplash reforms and thus allow a clearer picture to emerge of MOJP post reforms frequency, severity and indemnity spend.
Even though the RTA Protocol and the MOJP is now attracting a lower claims volume, insurers should not disregard the impact of MOJP indemnity spend on overall claims costs in the motor injury low-value claims space. With such claims attracting not only increased damages but also legal costs, the MOJP still has a significant role to play in the sub £25,000 motor claims injury space and insurers should not take their eye off the MOJ portal ball when assessing the overall impact of the whiplash reforms on low-value motor injury indemnity spend.
Director of Strategy - Motor Personal Injury
The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.