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Latest Claims Portal data ends 2016 with pattern of reducing claims volumes still in place

17 January 2017

The release by Claims Portal of their MI for December allows us to analyse latest trends not only on the usual monthly basis but also at the end of the calendar year.

Summary

Larger falls in the intake of new claims across all portals were noted in December than might have been expected. While this will be due in part to seasonal aspects, there seem to be other factors in addition at play, potentially linked to the government plans for reform in these areas and disruption in the claimant marketplace as a result.

On a yearly comparison, there are also reduced new volumes into all portals which are unexpected in terms of longer term trends which had already been visible.

December also saw a substantial reduction in the number of settled claims across all portals to levels not seen for a long time, though this in turn can be set against the background of more use of stage 3 of the process which continues to be seen as a long term trend.

Volumes of RTA claims in December

In December there were 57,833 new claims entering the RTA portal. This was substantially lower than the 69,914 seen in November (based on corrected data for November from Claims Portal) with the month-on-month fall being of no less than 17.2%.

Falling volumes are usually seen at this time of year when comparing December’s level with that seen the previous month, but this year it was a larger fall than seen recently. We can see this when we measure this year’s decrease of 17.2% with those seen in earlier years of 14.5% in 2015, 10.2% in 2014 and 15.5% in 2013.

In fact December 2016 like the two previous Decembers was the lowest month in the year for new claims. The obvious reason for this state of affairs is the fewer days worked by claimant lawyers in December, so that they have fewer days in which to submit new claims.

We saw this same factor in operation when comparing October and November as the increase of 4.6% could be attributed to there being 22 working days in November as compared to only 21 in October.

Jan 17 1 
What we can see from the graph above is that the number of new RTA claims in December was at its lowest level since December 2013 and also the lowest for three years. On the graph above which spans five years only three months have been lower. The monthly level is now below 60,000 for the first time in 36 months as well.

Volume of RTA claims in calendar year 2016

With the completion of the year’s data there were 816,053 new RTA claims submitted to the portal last year. This is a fall of 6.9% from the level of 876,214 reached in 2015, which in turn was the highest level yet reached.

The fall in 2016 follows two previous years of increases seen both between 2013 and 2014, and between 2014 and 2015. The level seen in 2016 sees annual volumes returning downwards close to the 2013 number of 820,766. The only year which has seen a lower number was in 2011, when the RTA portal was in its infancy.

Volumes of RTA claims in December – weighted for working days

The number of working days in the month factor also looks a relevant one when we look back to the months of December in the years between 2013 and now. The largest drops between November and December of 15.5% in 2013 and 17.2% in 2016 were seen in years when there were only 20 working days that month, while there were 21 in 2014 and 22 in 2015 when the drop was smaller.

In 2016, there were 20 working days in December, so a fall in working days of 9.1% when compared to November. But perhaps claimant lawyers may not have worked full days on 23rd and 30th December? In fact, it is only if you disregard both of those two days from the working month that you get to a position where the drop in December can be fully explained by this factor.

The graph below shows the same data that appears on the first graph, but weighted so as to allow a correction for the number of working days in each month. What can be seen from this is that in each year apart from 2013 December was the lowest month for submitting new claims, even when the number of bank holidays which occur during that month is taken into account.

Jan 17 2

What seems to be the conclusion is that this bank holiday factor is insufficient by itself to explain the decreases seen in December. More holidays are being taken in claimant operations at that time of year it seems, and this factor is therefore having an additional impact beyond weighting purely for the bank holidays themselves.

Volumes of RTA claims – 12 months cumulative

Jan 17 3

The low number of new RTA claims seen in December has impacted on our 12 month cumulative analysis as well. Another fall has been seen, so on this measurement we have now seen drops in 14 of the last 16 months.

Prior to that 16 month period which counts back to August 2015, we had seen a 16 month passage of time between April 2014 and August 2015 during which there had been successive monthly increases on this measurement. However, the rate of decrease over the last 16 months has been slower than the rate of increase over the preceding 16 months as can be seen from the graph above.

This time the monthly decrease on the cumulative way of measuring was 0.58%, more than the 0.34% drop seen between October and November, but lower than the falls of 0.78% and 0.85% encountered over the two preceding months. We commented last month that the rate of decline had slowed down, but this month the opposite is the case.

New casualty volumes in December

Jan 17 4

No doubt for the same reasons as with RTA, all three casualty portals showed a significantly reduced new claims intake in December when compared to November: in fact in all three portals the reduction was greater over those two months than the 17.2% seen in motor. There is further evidence of decreasing new claims intakes into these three portals in addition, and there is some evidence of common themes applying between these three types of claim.

New PL claims

In PL there were 3,946 new claims in December, a drop of 22.5% over November. The monthly figure seen last month was the first time it had been below 4,000 since December 2013, which was the fifth month of the portal being open.

In this portal too decreases are usually seen as between November and December. Over the last three years those falls have been seen ranging between 12.8% and 21.8%, but not as much as this year.

New EL accident claims

Across in EL accident, there were 3,211 new claims in December, a reduction of 23.4% from November. This is the first time that the monthly figure has been below 3,250 since February 2014, the seventh month of this portal being open.

The same pattern of falling levels between November and December is the norm; though the decrease this year is larger than before where falls between these two months in the past have ranged between 11.6% and 21.6%.

New EL disease claims

In EL disease there were 632 new claims submitted to the portal in December, that’s 25.1% lower than in November. The number of new EL disease claims entering the portal had not been under 700 since October 2013, more than 3 years ago, and at a time when the casualty portals were only three months old.

Following the same pattern of decreases at this time of year, the extent of this year’s drop is larger than those seen previously between November and December which have ranged between 11.0% and 14.1%.

Volume of casualty claims in calendar year 2016

Completion of the calendar year allows this measurement to be looked at as we have for motor, though of course in view of the more recent opening of the casualty portals we can only look back to two previous years of data.

In both the PL and EL disease portals, the 2016 number was the lowest full year to date. In the EL accident portal 2016 there was a fall from 2015, but the number remained above the 2014 level.

In the PL portal, 63,735 new claims entered in 2016, which is 19.2% lower than the 78,846 new claims in 2015, and also lower than the 73,800 encountered in 2014.

As to EL accident, in 2016 there were 49,700 new claims, a drop of 8.1% when compared to 2015, but higher than the level of 47,736 seen in 2014.

In the case of EL disease, the number of new claims submitted to the portal fell last year to 11,386, the extent of the fall being as much as 50.7% from the 2015 level. The 2016 number was also below the 2014 level of 16,489.

Volumes of casualty claims – 12 months cumulative

Jan 17 5

On this measurement and as the graph above demonstrates, PL and EL disease continue to fall back in terms of volumes of new claims, while EL accident is relatively stable with only a small rate of decline.

As to PL, we have now seen consecutive monthly falls over each of the last 18 months. The current level of 63,735 over the preceding 12 months is below the April 2015 peak of 77,384 by 17.6%, and over the last 12 months the level has fallen by 12.5%.

In the case of EL accident, there have been falls in 11 out of the last 13 months. The current number of 49,700 is below the September 2015 high of 54,879 by 9.4%. Over the last 12 months the level has fallen by 8.1%.

12 consecutive monthly falls have taken place for EL disease, with the current level of 11,386 being below the high reached in December 2015 of 23,113 by 50.7%, which therefore is the same percentage by which there has been a fall over that same period.

Retention rates

Looking this month at the data on a month by month basis, the first graph shows the picture excluding from the definition of claims retained in the portal those cases which proceed to stage 3 on quantum.

Jan 17 6

That there was a deteriorating picture last month can be seen on the right hand side of the graph above. The same data this time including stage 3 cases within the definition of retained claims shows that same trend but with of course higher retention rates, though with the RTA rate for the month of December having dipped below 50%. 

Jan 17 7

 

Settled claims

Settlement volumes for RTA are shown on the next graph. Only 14,044 claims were settled at stage 2 in December, the lowest ever in that graph and in fact the lowest since January 2011 some six years ago.

Part of this will again be related to the December factor. It is usually the case that settlement levels are lower that month as part of the lower level of activity with the portal generally, as has been seen in previous years, even though in fact hardly in 2015.

Jan 17 8

A similar picture is seen in the three casualty portals with the data aggregated between those portals. December 2016 saw the lowest settlement levels since December 2013. 

Jan 17 8

The picture of low settlement rates last month across all portals will in addition to December-specific factors be linked to lower volumes of claims entering the portals, as well as more claims proceeding to stage 3 as examined below.

RTA Stage 3 and settlement levels

Stage 3

Use of stage 3 seems to have been affected by the December factor last month, even though it has been difficult to see it in evidence in past years. 5,278 RTA claims went forward to stage 3 last month, a fall of 14.7% over November.

Referring back to the analysis of the incoming new RTA claims however shows that the extent of the decrease in cases moving to stage 3 is less than the drop in new claims entering the process, so if one part of the portal processes (i.e. entry) can be affected by this seasonal aspect, why not another?

At the same time we note that Claims Portal have corrected the data showing the number of RTA claims proceeding to stage 3 in November: the number falls significantly from 6,797 to 6,191. Instead of being the highest level ever by 5%, November’s number is now only the second highest ever and behind the 6,455 seen in August, August’s level appearing to be something of an aberration as the graph below shows. 

Jan 17 10

PSLA levels

The RTA PSLA figure seen in December was £2,728, an increase of £8 or 0.3% over the preceding month. The only higher level was the untypical figure of £2,851 which was seen in October.

The level is now 6.3% above the figure of £2,567 which we saw in November 2015, at around the time that the 13th edition of the Judicial College Guidelines was published.

Casualty Stage 3 and settlement levels

Stage 3

In all three casualty portals use of stage 3 fell in December as with the RTA portal, no doubt due to the same seasonal factors. PL fell by 8.9% to 56, and EL accident fell by 19.0% to 61. The limited number of EL disease stage 3 cases fell from 5 to 2.

Until the last 3 months, the number of PL claims reaching stage 3 had been higher in PL than EL accident, no doubt reflecting the greater number of claims entering the PL portal. However, December was the third consecutive month in which the trend has reversed – there are now more EL accident claims going to stage 3 than PL cases despite there being fewer EL claims within the process.

What seems to be happening is that in this respect EL accident claims are moving more quickly towards RTA practices and specifically more use of stage 3 than is being seen with PL claims.

PSLA levels

There is a mixed picture as to PSLA levels across the casualty portals.

In the case of PL, the average in December reached £4,179, the highest ever, while EL accident also remained high, despite seeing a month-on-month fall in December. EL disease remains low at £3,682 when compared to levels achieved earlier in that portal, though In December there was in fact an increase over November’s level.

Jan 17 11

If we look back over the period since November 2015 when the 13th edition of the Judicial College Guidelines can be expected to have had an effect as we have done with RTA claims, then PL has seen PSLA levels increase by 8.9% and EL accident has risen by 1.3%. EL disease on the other hand has seen settlement levels fall by 7.9%. This is not a reflection on reduced claims values in disease claims, but instead relates to the small claims numbers upon which averages are calculated and to the difficulties encountered in successfully operating the portal process in the context of disease claims.

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

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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