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Interview with Donna Scully, Director at Carpenters Group

We’ve caught up with another of our speakers from our recent 10th Motor Claims Conference – Donna Scully, Director at Carpenters Group 

As LEI as a product takes on more significance, will insurers move to selling it as a stand-alone again and charging more?

The MOJ estimate that around 50% of motor claimants will have LEI post reforms.  Policies are currently provided both as a stand-alone ancillary product, and embedded within the underlying motor policy.  LEI polices will become an even more valuable product post-reforms, as customers turn to their insurer to pay the legal costs that are no longer recoverable from the third party.  The new reliance on LEI will increase the attractiveness of the product and should increase sales.

It is highly likely that insurers will pass the cost of claims onto customers through increased premiums.  Care needs to be taken to protect consumers to ensure that, at the same time, the nature of cover is not restricted in order to reduce the number of claims covered.

Is the LIP portal likely to increase the volume of speculative fraudulent claims?

There is certainly the potential for considerably more fraudulent claims. The problem with creating a frictionless claims process is that unless we’re very careful we are opening the door to fraudsters keen to exploit the new process.

In the absence of humans to check the facts, fraud will become increasingly digitalised with ghost claims. Unfortunately, I think it will be the inevitable price to pay for squeezing lawyers largely out of the system to be replaced by bad claims farmers.