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UK ‘too enmeshed’ in referral fees

A decade on from Ireland's 'lawyerless' PIAB model, insurance press reports of its potential in the UK have been played down.

The UK has left it too late to adopt a personal injury compensation model similar to Ireland's, according to Patricia Byron, chief executive of the Emerald Isle's Personal Injuries Assessment Board.

She told Post Magazine the issue of referral fees 'enmeshed' between the legal profession and claims community would rule out a board model in the UK. 

The board in Ireland was set up to combat the rising cost of insurance. The government body handles personal injury claims and compensation for accidents on the road, workplace or in public places.

However, Patricia Byron is quoted in the Post as saying: "The UK would be starting from a much more tricky location." 

Motor insurance rates will tick up in 2015 says analyst

Meanwhile, insurers here in the UK could get their wish in 2015 as rates will start to rise next year after nine quarters of reductions.

According to analysts at Oriel Securities, the sector is going to hit the floor pretty soon. The company said: "Motor rates have fallen for nine successive quarters and by 30% since peak rates in 2011. However, we would note that rates are still 18% higher than 2008, prior to a sharp upturn in bodily injury claims."

Oriel analysts believe increases will be moderated by the strong balance sheets of the sector's largest businesses, along with continued appetite for motor risks. 

New categorisation for serious spinal and brain injuries 

In a month where personal injury topics took up a lot of news coverage, Post also reported that the Institute and Faculty of Actuaries (IFoA) has produced a new categorisation for serious spinal and brain injuries to help insurers estimate future liabilities more accurately.

The new system is based on long term IFoA analysis of motor insurance data that showed claims of £1m or more were likely to be paid as periodic payment orders (PPOs), meaning they often remain on balance sheets for decades. 

Report author Sarah MacDonnell said previously there had been no standard way of capturing the impact of a severe injury on mortality. 

She was quoted as saying: "With advances in medicine it is not a stretch to see a baby involved in an accident living to 100 and requiring support for the entirety of their lives. By categorising the severity of injuries, we will capture data that can help to provide more accurate mortality estimates." 

The driverless car worries Warren Buffett 

A report in the Guardian that Google's fleet of driverless cars had covered 500,000 miles on Californian roads with only one minor accident (caused by human error) has profound implications for insurers. 

This was a theme also picked up in the Wall Street Journal, which revealed driverless cars could pose a serious threat to Geico, the cash-cow insurance business of Warren Buffett, the world's greatest investor. 

However, Warren remained upbeat about the future of Geico. He was quoted as saying: "I feel very, very good about Geico and its management's ability to measure risk. Self-driving cars are a real threat to insurers if it's successful. It can happen, but I don't know how to forecast it. It certainly could happen, but we're not for one second-thinking about selling Geico."