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July’s portal data shows a return to reducing volumes though still above post-LASPO levels

23 August 2016

Yesterday afternoon saw the release of the July MI from Claims Portal Limited. It shows a consistent picture of decreasing claims volumes into not only the RTA but also each of the casualty portals last month, which in turn maintains the pre-existing picture of medium term declines in volumes of new claims in all 4 portals over the last year. The lower volumes in RTA claims still though remain significantly above the post-LASPO levels seen in spring 2014.

Against this background, we continue to await news from the MoJ and indeed from government itself as to where it intends to go with the Cameron/Osborne plans announced in last November’s Autumn Statement to increase the small claims track limit and to remove the right to recover general damages in minor soft tissue injury claims following the election of Theresa May as PM as well as her appointment of an all-new MoJ team of ministers.

There are no obvious clues as the government’s next move on those reform principles, though it is during this autumn that the direction and speed of travel is likely to become apparent. Any attempt to make specific predictions at this point would be an exercise in pure speculation.

New RTA claims in July

In July there were 66,912 new claims entering the RTA portal. After seeing an increase of 7.3% in the data for June, the July data shows a fall in volumes of 4.8% when compared to June.

23 August 1

It seems that we have returned to a pattern of reducing numbers. July’s level is below the 2015/16 average of 71,491 by 6.4% and is also below the average for the first 6 months of 2016 of 70,186 by 4.7%.

Are the particular months involved significant in interpreting the data this time so that we need to consider exceptional factors altering the conclusions we reach? Probably not, as while we have seen a fall between June and July this year, over each of the previous 4 years in the RTA portal we have seen increases as between June and July. So this year’s fall between June and July can be seen for what it is.

New RTA claims 12 months cumulative

Rounding off the variances in the monthly data as always leads us towards the 12 month cumulative graph for visibility into medium term trends.

23 August 2

 

Last month we reported that against a picture of falling cumulative volumes, we had seen a very small monthly increase when the June data was added in, of 0.016%. As is usually the case, Claims Portal continue to make fine adjustments to previous months’ figures when presenting new data the following month.

In releasing the July figures, Claims Portal have marginally adjusted the number of new claims in June down from 70,574 to 70,287. Ordinarily this would be of no statistical relevance, but in fact here it retrospectively turns the small rise we reported last month of 0.016% into a small decrease of 0.017%.

We can therefore no longer see June’s data as bucking the downwards trend, even if on first analysis it did so only to a marginal extent.

Adding in July’s data, we see a fall in the 12 month total from 853,813 to 840,091, a large enough fall to be noticeable on the right hand side of the graph above.

We have now seen 8 consecutive monthly falls on this longer term form of measurement, which is including the June adjustment which has just been highlighted. 10 of the last 11 months have now shown a decrease on the 12 month cumulative assessment. In the medium term, RTA volumes are falling.

But we also need to set this in a broader context which can be done in either of 2 ways. One conclusion which can be drawn is that the current figure of 840,091 has fallen to an extent over the last 12 months where it is below the most recent peak seen in August 2015 by 4.6%.

But the other form of analysis is that once we had moved beyond the peak in volumes caused by the effects of the LASPO reforms, annual volumes fell to a level of 771,711 which was reached in April 2014. The current level of 840,091 is still as much as 8.9% above April 2014 levels.

While therefore current trends continue to point downwards, there is still some way to go before we are at a level seen after the LASPO effects had passed, and before the claimant market had adjusted its processes so as to increase volumes again.

Without the Autumn Statement reforms, which may already be affecting this data as claimant operations anticipate the likely future change, how far will this current decreasing trend in fact continue?

Department for Transport data

The 2 earlier graphs showing the RTA data also include the latest quarterly published statistics from the DfT. There is a contrast in the trends as to the number of vehicle miles travelled, and the number of accidents leading to injury.

The number of accidents causing injury remains reasonably stable, as the red line on the first graph shows. The latest data for Q1 published earlier this month shows 43,990 such accidents.

Also published this month were the latest statistics showing vehicle miles travelled on our roads, depicted in a black line on each of the first two graphs. The latest data of this type is for Q2 of 2016. Seasonally adjusted, following consistent increases over the last 2 years or more, this quarter there is a fall from 80.3bn miles to 79.9bn miles.

Both sets of DfT data are shown on the graphs at the point in time at which we see them impacting on the Claims Portal data, if there is in fact a link between the DfT numbers and those from Claims Portal. In truth, the correlation can at best be only a weak one, if there is one at all.

The variations in the number of portal claims seems to be more dependent on other factors in the claims market rather than on the number of miles travelled on our roads,  or even the number of accidents causing injury.

The latest fall in the number of miles travelled would therefore suggest a future reduction in the number of new portal RTA claims, but this may well have occurred anyway.

New casualty claims in July

23 August 3

The same pattern is seen as in motor. Though increases in monthly volumes were seen in the June data for all 3 casualty portals, the July figures show monthly falls across the piece.

In PL there were 5,373 new portal claims in July, a fall of 5.5% over June.

This level of PL claims is below the 2015/16 average of 5,857 by 8.3% and is also below the average for the first 6 months of this year of 5,524 by 2.7%.

In each of the last 2 years this portal has been open we had seen month on month increases at this time of year when July is compared to June, but not this year. So the data is what it is, there is no seasonal aspect to take into account.

In EL there were 4,137 new portal claims in July, a fall of 1.9% compared to June.

EL claims are therefore below the 2015/16 average of 4,375 by 5.4% and are also below the average for the first 6 months of this year which was 4,247 by 2.6%.

As with PL, in each of the last 2 years this portal has been open we had seen month on month increases at this time of year when July is compared to June, but not this year.

As to EL disease there were 853 new portal claims in July, a decrease of as much as 15.7% when compared to June.

EL disease claims are now below the 2015/16 average of 1,665 by a level as much as 48.8% and are also below the average for the first 6 months of this year of 1,094 by 22.0%.

In one of the last 2 years that this portal has been open we had seen a monthly increase at this time comparing July to June, but this year we have a fall.

New casualty claims 12 months cumulative

23 August 4

In addition to this month’s falls, 12 month trends are also downwards. This is consistent across all 3 casualty portals though the length of time over which the trend has been in existence shows some variation.

In the case of PL, there have now been 13 consecutive monthly falls, and the current level of 77,384 is 12.9% below the peak of 77,384 seen in April 2015.

In EL, the trend is not quite as acute and we have seen decreases in 7 out of the last 8 months. The current figure of 50,960 is 6.7% below the peak of 54,591 seen in July 2015.

And as for EL disease we have now seen 7 consecutive monthly falls, but the lower volumes in this portal and the greater volatility in the numbers leads to a position where the current level of 15,832 is now 31.5% below December 2015’s peak of 23,117.

But we are not able to perform the other leg of the analysis which we could with RTA claims, that is comparing current levels with a post LASPO comparison peak. The casualty portals do not contain mature enough data as at April 2014 for that purpose.

Retention rates

This next graph shows cumulative trends over 12 months as before.

In RTA there is a downwards trend over the last 2 years as the number moves away from 50% and is now closer to 40%.

EL shows a line moving downwards towards 20%; PL the same but moving downwards towards 15%.

EL disease continues to fluctuate, now between 10% and 0%.

23 August 5

RTA stage 3s and PSLA levels

The use of stage 3 remains high at 5,868 in the month of July as the bars on the graph below show. While this represents a 5.0% fall from last month’s peak of 6,180 it remains the second highest month ever.

PSLA is of course demonstrated by the line on the same graph, and last month reached £2,675, the second highest ever and lower only than the untypical month of October 2015.

RTA PSLA levels are now 3.7% higher than the monthly average of £2,580 seen between November 2015 and February 2016, following the effects of last autumn’s JCG increases.

23 August 6

Casualty stage 3s and PSLA levels

The position with PL and EL accident is similar to RTA, though EL disease is difficult to fully analyse based on small volumes.

23 August 7

 

Both PL and EL saw the second highest monthly use of stage 3 since those portals opened at 66 and 54 respectively.

As to PSLA, PL saw in July a level of £4,038, the highest ever, and 5.5% over the monthly average between last November and this February of £3,829.

In the case of PSLA in EL claims, in July this was £3,985, the 3rd highest ever though in fact a monthly drop from June. This level represents a 4.0% increase over the monthly average between last November and this February of £3,832.

In the case of both PL and EL, the JCG are likely to be having an effect. As we expect will be the fact that older and potentially larger claims are settling within those portals than previously.

In the case of EL disease, there were only 3 stage packs prepared in July, a very modest level, while PSLA stood at £3,753, which in fact is 2.4% below the monthly average November 2015-February 2016 of £3,844.

The lines on the graph above show the increasing PSLA trends for PL (blue) and for EL (red). Both are now higher than the corresponding level for EL disease (orange).

Concluded claims

It is worth looking at the development of patterns showing how portal claims conclude. This suite of graphs does so by reference to an assumed stable claims intake, and breaks that intake down into the defined ways in which they can conclude.

The RTA graph shows a marginally falling number of claims exiting at stage 1, though a slightly increasing number “otherwise exiting” as defined by Claims Portal processes. The proportion concluding at stages 2 or 3 on quantum when added together seem relatively stable, but of that group stage 3 is increasing in significance as stage 2 settlements decrease.

23 August 8

The PL graph shows the highest proportion of stage 1 exits, though the current level has fallen by around 10% over the last 2 years. There are a correspondingly lower proportion of claims “otherwise exiting”.

23 August 9

When compared to PL, EL shows a lower proportion of stage 1 exits no doubt due in part to better knowledge of the appropriate defendant and its insurers on the part of the claimant, but higher proportions of “otherwise exits” and stage 2 settlements.

23 August 10

The graph for EL disease shows a significant number of stage 1 exits, but a higher proportion still leaving through "otherwise exit”, and of course a lower level of settlements at stage 2 as well as the number moving into stage 3.

23 August 11

We await next month’s data for further analysis together with news of further strategic reform developments from the MoJ.

Contact

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

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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