Jon Dye joins other insurance CEOs in encouraging action to tackle rising motor and liability claims costs
Posted on: 22 March 2018
- The signature of Allianz Insurance Chief Executive, Jon Dye, sits alongside those of other CEOs representing leading insurers in a joint letter to Justice Secretary David Gauk, setting out their views and expectations for the Civil Liability Bill.
- In addition to the insurance industry’s letter, leaders of seven NHS organisations also wrote to the Justice Secretary outlining the need for reforms to the personal injury Discount Rate.
Jon Dye endorsed a pledge to pass on to customers cost benefits arising from Government action to tackle the extent of exaggerated low value personal injury claims and reform to the personal injury Discount Rate.
The pledge was given shortly after the unveiling of the Civil Liability Bill, designed to tackle various issues relating to personal injury claims that are causing insurers’ costs to rise significantly and consequently premiums to rise.
Within the message, backed by 25 other insurance CEOs, its stated that:
We remain committed to the principle of 100% compensation for victims of catastrophic injury but we also want to see a modernised framework that is fair for everyone who buys insurance. If the Government’s proposed changes are implemented, we believe this will deliver on this principle. Serious injury claimants will still benefit from one of the most generous compensation systems in the world and one which would be roughly fifty per cent more generous than it was just over a year ago. Those who wish to will still be able get permanent annual payments, such as PPOs, and young victims with long life expectancy would nearly always be advised to do this. The size of these payments is not affected by the Discount Rate.
"Subject to any commercial responses made when the Government stated its intention to change the framework, the Government’s reforms for setting the personal injury Discount Rate may also assist individual companies in relieving some of the future cost pressures on motor and liability insurance for ordinary customers."
A press release from the Ministry of Justice published on 20 March 2018, shortly after the letter was made public, does emphasise the aim to "cut car insurance premiums" by tackling the issue of whiplash claims in a "compensation culture". The use of the so-called Ogden rate used when calculating compensation for serious personal injuries is also set to be reviewed.
After the Government announcement introducing the Bill, Huw Evans, director general, ABI, commented:
If passed, these proposals would be great news for motorists. People and businesses are paying more for their motor insurance than ever before and we need changes to the law to tackle some of the root causes."
Alongside his comments, the ABI added a list of points regarding motor insurance costs, including statistics that explain cost increases.
Simon McGinn, general manager, Allianz Insurance plc, also supports the message and had this reaction for the insurance trade press:
Allianz’s objective has always been to compensate genuinely injured people quickly and fairly without influence from disproportionate legal costs, so we welcome the whiplash claims provisions within the Bill. The principle of fairness is also embodied in the industry’s position on the Discount Rate and the measures announced provide a structure around which this can be achieved. We look forward to seeing the Bill progress into Law and to the benefits that will accrue to customers as a result."