Huge insurers' profits impact on whiplash claims
With claims for whiplash injuries following car accidents
identified by MPs as a major factor in the rising cost of motor insurance, the Admiral insurance group
has reported record annual pre-tax profits of nearly £300m
For the 8th year in succession, The Cardiff firm has reported record profits and turnover. Admiral, which insures 1 in 10 British motorists, saw its number of customers up by 22% to 3.36m, with turnover increased by 38% to £2.19bn.
The figures have led to concerns that insurers are continuing to make vast profits
whilst government proposals are tabled that could limit the rights of consumers to make claims for whiplash
and similar injuries.
Planning a crackdown on what David Cameron has called a "compensation claims culture", the Ministry of Justice is looking to reduce the yearly £2-billion cost of whiplash claims.
With over 1,500 whiplash claims
made each day in Britain, ministers believe that bringing down compensation claims will in turn reduce the costs of motor insurance premiums.
With its Legal Aid Reform Bill
, which is currently passing through the House of Lords, the government is already moving to decrease whiplash compensation claims by banning referral fees and reforming no-win-no-fee legal practises
and reduce even further fixed fees recoverable by claimant solicitors which will have a detrimental effect on the quality of service that solicitors will be able to provide
However, the government's squeeze on claims threatens to penalise genuine victims of whiplash.
According to some financial advisors, the rising cost of insurance is related to the legal changes that are in the pipeline and not necessarily whiplash claims, the majority of which are entirely legitimate.
Which?, the consumer group, has called on the government not to penalise drivers who legitimately claim for whiplash injuries