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Headline figure pointing upwards on latest data from the Portal Company

17 November 2014

The monthly Portal Company statistics released late on Friday afternoon should as usual be looked at in detail to identify the latest signs of trends affecting claims volumes that will be of interest to insurers involved in all types of injury claims. The statistics for the RTA portal continue to be an important barometer for the whole market as the changes to the motor figures continue to be the best overall guide.

The 80,000 barrier broken again

In the month of October, there were 80,300 new claims notified to the RTA portal, a rise of 5,000 from the previous month. Except for 3 specific months when the data was affected by the in-coming Jackson reforms about 2 years ago, this is the highest monthly figure since the RTA portal was established. While there are riders to be taken account as mentioned before, both the size of the new CNF figure, as well as the rise of 5,000 over the month, look worthy of note.

In the case of the September data, we noted the large increase of 8,500 in the number of new motor claims up to a figure of 75,000, but recognised that one of the factors behind this was the desire by some claimant lawyers to lodge CNFs that month before phase 1 of the MoJ’s independence reforms came in at the end of that month. There is no such factor to explain the large rise in October’s figures, as phase 2 of those reforms has no specifically set commencement date yet and it is recognised that there are at least a couple of months left of current processes before a go-live date for phase 2 at some point in early 2015.

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A rider to the data

What we do have to take into account when looking at this month’s data is that as was the case last month, and also in March, the Portal Company have annotated their data with a reference to the fact that certain claims are exiting the process and then being resubmitted as new claims following a change in the name of the law firm acting for the claimant, such as with the recent creation of IME Law. The same annotation was made last month too. Existing claims being handled by Irwin Mitchell have been exited and resubmitted by IME Law, and have as a result been included both in the data for exited claims and then when resubmitted, in the number of new claims.

We should recognise that the Portal Co MI collection processes have never distinguished resubmitted claims in their figures, so that other monthly new CNF figures are likely to have been affected by the factor to some extent over the last couple of years. This factor is unlikely to have been restricted to the 3 specific months where the Portal Co have identified it as a factor. But the size of its effect can be assessed in broad terms as we do below for last month’s figures, and it should not deflect us from looking to draw conclusions from the data where we can.

Making the adjustment

A view can be taken as to the size of the effect of this factor by reference to the number of exited claims, and considering the extent that that number is higher than the average number of exits. Last month, we estimated that of the new CNFs, between 1,000 and 3,000 were attributable to this effect. This month, the number of exited claims has risen by 1,000 from last month, so applying the same logic, it may be that between 2,000 and 4,000 of this month’s new claims figure of 80,300 are affected by that factor. This would give an adjusted new RTA figure of 76,000 to 78,000 for the latest month.

Reaching a conclusion

Depending on the actual period chosen for the exercise, the pre-LASPO norm for this type of claim was 67,500. October’s adjusted figure looks to be around 10,000 above that figure. It is right to recognise that it’s not just that simple a comparison as we are now more than a year into the new process where £10-25k claims have been entering the portal so are included within the figures, and these will add a few percentage points to the total. We cannot reach a definite conclusion from just last month’s data but there is evidence from the latest new claims figure of us reaching now a level which is something similar to the pre-LASPO level. And if that is right, the question beyond that is where they will go to next?

The recent IFoA report

Since we last looked at the data, the Institute and Faculty of Actuaries’ Third Party Working Party investigating third party motor claims has produced its latest report which included the findings both that portal claims were at pre-LASPO 2011-12 levels, but also that they had fallen 10% from their LASPO-related peak which we took to be a reference to the period of time when LASPO was being introduced and we were seeing pre-reform activity by claimant lawyers looking to beat the in-coming changes. When reporting on the IFoA report some media concentrated on the reference to the 10% drop without putting it in its context. It should anyway be recognised that the Portal Co data looked at by the IFoA ran until only April 2014 and we are now 6 months forward from then and able to draw up to date conclusions.

DfT data

There are now further DfT figures to take into account, the road casualty numbers for Q2 and vehicle miles for Q3. Both have moved upwards in the latest quarterly data after a fall the previous quarter. Upward trends in these figures are likely to feed through to new claims numbers.

But as ever, these details from the DfT are only part of the picture. There are many others affecting motor claims numbers from the number of claimants per accident, the ratio of third party injury to third party damage claims, the costs of fuel, we could go on. A significant factor will always remain - the type of claimant operator business structures in use and their abilities in attracting new cases. Perhaps an important part of the message from this month’s increased Portal Co figures involves  recognition of the fact that we have reached the position where in general those claimant structures seem to have reached a degree of maturity, at least as far as we can tell from the impression they are making on claims volumes.

APIL data

APIL have not publicly produced any data of their own but were reported last week as having obtained data from the CRU under a freedom of information request allegedly providing evidence of a 29% drop in whiplash claims between 2010/11 and 2013/14, falling from 567k to 401k. This type of claim will represent the majority of portal claims of course. We see no value in the APIL exercise when set against the more valid data from the Portal Co. The reason for the fall in the APIL data is probably connected with the way in which claims are reported to the CRU, or how the CRU measures those reports. 

EL and PL new claims

The graph this month shows a continuing upward trend in both the EL and PL portals. EL was up to 5,218 and PL to 7,827. We do not yet seem to have reached a peak. We may though be entering a period of levelling off. Time will tell.

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The EL disease new CNF number last month was 1,619, a fall from last month’s figure of 1,627, and has now shown no growth since July. Claimant lawyers seem to be able to avoid the EL disease portal in a significant number of claims, including by pursuing tactics such as including more than one defendant in claims including in situations where previously only one defendant may have been proceeded against.

Retention rates

Not a lot of change this month. The RTA figure is just below 50% and will be temporarily affected by the exiting of Irwin Mitchell claims prior to them moving to IME Law. EL accident sits between 30 and 40%, PL at 20-30%, while EL disease continues to struggle and is currently at 10-20%.

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PSLA and court packs

The well-defined trends seen before continue. In RTA claims, the number of court packs has risen to a new high of 3,289, and the PSLA figure has increased to £2,579. The inexorable increase can be plotted clearly on this graph. The number of RTA cases moving to stage 3 continues at around double the rate of 12 months ago. The increase in RTA PSLA figures is also significant. It’s not just the Simmons v Castle extra 10%, but also the same factors identified previously continue to operate, of the pursuit of stage 3 costs and the sharing of increased damages with the lawyer through the new CFA mechanisms.

In EL accident and PL, the lines on the graph show steeper increases for PSLA than for RTA but there are currently many fewer of those types of claim in the portal and it is the case that larger claims are settling than was the case say a year ago. The increases in EL accident and PL cases moving to stage 3 are of limited significance due to small sample size, but are shown at the top of each month’s bar graph.

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We will continue to review all of these trends.

Contact

For more information please contact Simon Denyer, Partner on +44 (0)161 604 1551 or email simon.denyer@dwf.co.uk

By Simon Denyer

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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