This is particularly so if the fleet effectively self-insures or carries a large policy excess.
Norwich Union, with a fleet book of £60 million, recently announced that it intends to increase fleet premiums from next year.
One complaint I often hear is that the value of motor claims seems to be increasing, which suggests there is no overall increase in the annual number of accidents and claims for damages for personal injury. This seems to be mirrored by the experience of fleet insurers.
One significant part of any personal injury claim which receives little or no publicity is the Government’s recovery of benefits paid to injured people as a result of their incapacity. Then there is the NHS accident charge both for initial out-patient treatment and in-patient care by virtue of the Road Traffic (NHS charges) Act 1999.
The Department for Work and Pensions was tasked some years ago to recover these outlays and does so through a department known as the Compensation Recovery Unit (CRU). The sums recovered are commonly known as the CRU recoupment and are paid by the ‘compensator’, whether that be an insurer or an organisation which self-insures. Essentially whoever pays the personal injury damages picks up the liability to the CRU.
Previously the CRU recoupment arose only as a result of road traffic accidents. But Part 3 of the Health and Social Care (Community Health and Standards) Act 2003 has made it possible to recover NHS charges in all types of accident.
Consultation is currently under way with a view to implementing the new provision by April 2005.
It is proposed that the charge will remain the same as that currently applied to road traffic cases – £473 for an out-patient visit and, on admission to hospital, a daily rate of £582 applied to an overall cap of £34,800.
But unfortunately the ability to recover these charges has a significant impact on the insurance policy premium.
In 1999 £201 million was paid by compensators to the CRU. The forecast for 2003-4 is £275 million. In addition one has to add in the sums also being paid to the NHS via the CRU for hospital treatment charges. In the year up to April 2004 the figure recovered was just short of £106 million. The impact of these two areas of recovery have a significant impact on premiums.
But can fleet managers or their insurers have any control over these areas of loss? How a claim is handled can have an overall impact on the benefits recouped in the area of CRU recoupment of benefits .
For example, if a fleet driver is involved in a road accident and injures a pedestrian, who breaks a leg, the pedestrian is likely to claim for personal injury. They are likely be taken to hospital where NHS charges will be incurred and, on release, may be able to secure NHS physiotherapy. If not, any delay in their eventual recovery or long-term health problems caused by the injury will result in a claim for benefits until the individual can return to work. Those benefits will be recovered by the CRU from the fleet or their insurers.
Early rehabilitation of the pedestrian will result in a reduction of the benefits paid and a saving on the claim.
In cases such as this, rehabilitation schemes have now developed utilising the private health sector to achieve early intervention in the recovery. In this way the fleet manager and, where appropriate, the fleet insurers, can take a much more proactive role.
Even allowing for the cost of the private treatment significant savings can still be made.