Insurance claims stories impacted the industry from almost every angle this month. PremExtra reviews the biggest news including how the market's credit rating could be under threat from rising settlement costs.
Insurance claims stories impacted the industry from almost every angle this month. PremExtra reviews the biggest stories including how the market's credit rating could be under threat from rising settlement costs.
April opened with a claims story to end them all. The 'Trigger Litigation' involving Municipal Mutual Insurance finally laid to rest arguments over liability for mesothelioma which had run for almost two decades after the Supreme Court decided once and for all that insurers on cover at the time of negligent exposure to asbestos were liable for compensation. The decision was praised as the right one by most in the market, in particular firms such as Zurich which now owns MMI.
Were the next story to have been true at the time MMI first went into run off, things might have been a little different. The Law Commission has been reviewing England & Wales' somewhat archaic insurance contract law over recent years and it announced a proposal for unlimited damages in the event of late settlement. This proved ideal ground for Post Magazine's 'Good idea/bad idea' feature with International Underwriting Association director of Market Services Chris Jones in fierce opposition while risk managers trade association Airmic was represented by Technical Director Paul Hopkin who said: "no one should underestimate the huge, sometimes business-threatening consequences of such delays."
We've all got used to hearing bad news from credit rating agencies and for insurers, April was no different. This time, Moody's revealed that the system of granting Periodical Payment Orders for long term care could negatively impact the sector's credit rating owing to the requirement for insurers to buy annuities that fund PPOs. To tell the truth, this issue has existed ever since it was first mandated that judges consider them as a means to compensate claimants requiring lifetime care. The International Underwriting Association recently produced a report on their performance against more traditional lump sum awards which you can find here.
And finally, the Transport Select Committee returned with its '13th Special Report' on the cost of motor insurance, which "reiterated MPs' commitment to access to justice while also expressing encouragement at the government's "willingness" to clamp down on fraudulent whiplash claims". No great change there then!