Aviva is calling on the new Conservative Government to help tackle motor insurance fraud and in particular whiplash claims, which it estimates cost UK motorists £2.5 billion per year.

Speaking at the recent Brake Fleet Safety Conference, Mark Hampson, technical account manager at Aviva, said: “Fraud is a serious and worsening concern for the whole market. It is spreading and is prevalent in virtually every area of the UK.”

He highlighted a number of ‘blackspots’, including Bradford, Birmingham and parts of the north west (see map), where fraudsters commit ‘crash for cash’ or, more recently, ‘flash for cash’ scams.

“There are only 13 postcodes in the UK that are dedicated as low risk for fraud,” Hampson said.

Fleet operators are “particularly vulnerable” as their vehicles are liveried and a fraudster is “99% certain they will be insured”, according to Hampson.

Last year, Aviva experienced a 21% increase in organised fraud compared to 2013, which contributed to a record number of fraudulent motor claims (fleetnews.co.uk, November 6, 2014).  

More than 50% of Aviva’s motor injury claims fraud is organised and it has more than 6,500 suspicious injury claims linked to known fraud rings, which cost policy holders £50 on their premiums.

“Between 2005 and 2013, road traffic incidents fell by 30%, yet during that time, claims for personal injury increased by 62% and the average cost of a bodily injury claim increased by 73%,” Hampson said. “Britain is the only place in the EU where that figure is going up.”

To help tackle motor insurance fraud and the UK’s ‘compensation culture’, Aviva has produced a series of reports called Road to Reform.

It believes that “fundamental reform is needed to reduce the number and cost of whiplash claims” and that minor, short-term whiplash should be treated with physiotherapy and not cash compensation.

Its latest Road to Reform report, published in March, analyses other countries’ personal injury compensation systems and sets out a six-point plan to fight whiplash  (see panel, below).

The report concludes that “while we have come a long way thanks to reforms such as LASPO (Legal Aid, Sentencing and Punishment of Offenders), there is still more to do”.

It urges the Government to commission a white paper to encourage a wider debate about how the current compensation system operates and how policy changes, like those outlined in the six-point plan, could lead to a fairer, lower cost system.

Aviva’s six-point plan to fight fraudulent whiplash claims

• Reduced limitation period: all  whiplash/soft tissue injury claims must be made within 12 months of the  accident as opposed to the usual three-year limitation period.
• Time limits and a threshold: the  claimant’s symptoms must be more than trivial or simple ‘nuisance’ symptoms and must last longer than three months. The period and extent of suffering must be evidenced by medical records and/or evidence of treatment.
• Rehabilitation: insurers should provide treatment of up to three months to their policyholders or the injured party, regardless of who is at fault for the accident.
• Medical evidence: an independent medical report must be obtained by the claimant from the new Government body MedCo between three and 12 months after the accident for whiplash/soft tissue injury claims, where the symptoms persist beyond three months post-accident.
• Level of disability: all medical reports obtained via MedCo should assess  the percentage of disability caused. Compensation is only recoverable where  the expert considers that there is actual evidence of injury and the level of  impairment caused by the accident is,  for example, between 10-15%.
• Predictable damages: where a claimant is able to demonstrate, via independent medical evidence, that they have overcome the threshold, damages for pain, suffering and loss of amenity should be awarded against a clear, transparent tariff. This would make it clear to a claimant  what he/she is likely to be awarded.  Countries such as France, Spain and  Norway have fixed damages tariffs for  whiplash type injuries.