Are OIC claims beginning to level off?
10th May 2022Tweet
Article supplied by Insurance DataLab
The OIC portal has been operational since June last year, and a clearer picture of the new claims landscape is starting to emerge.
The RTA claims market has gone through a number of regulatory changes over the years, with the introduction of the Official Injury Claims (OIC) portal just one on a long list of major shakeups to the industry.
When the new OIC service became operational in June last year, it is fair to say that it took a while to get off the ground.
In its first month of operation, a little over 10,000 claims were submitted to the OIC, with more than 22,500 claims still processed through the original Claims Portal.
With the Claims Portal still picking up almost 70% of claims that month, the total number of claims for June 2021 totalled 32,676 – broadly in line with the 32,476 claims processed in the same month a year earlier.
Since then, the picture has changed somewhat, and while the proportion of claims being processed through the OIC has continued to increase – now accounting for some 76% of all claims submitted – the total number of claims has fallen compared to before the introduction of the OIC service.
Indeed, the total number of claims submitted between June 2021 and February 2022 is some 16% lower than the same period a year earlier.
That trend has, however, weakened in recent months with claims for February 2022 – the latest month for which both portals have released data – around 3% lower than February 2021.
February is, however, a traditionally quiet month for RTA claims, at least partially due to the reduced number of working days in the shortest month of the year.
Despite this, the 24,638 claims submitted to the OIC in February is still the second highest since the introduction of the new portal, only marginally behind the 24,749 claims submitted to the OIC in November 2021.
And with claims being processed through both the OIC and the Claims Portal seemingly beginning to level off, it could be that we are starting to see the level at which these claims will settle at.
But when it comes to damages being paid out by both portals, the picture is somewhat different, with the damages paid out through the Claims Portal rising significantly since June 2021.
Immediately prior to the introduction of the new OIC service, average damages paid out by the Claims Portal totalled £2,953, and this has now risen to £3,852 as of March 2022 – a third higher than the same month in 2021.
This should not come as a surprise given that the Claims Portal is now processing the more complicated and costly claims that fall outside of the remit of the new service.
The OIC, meanwhile, is not yet releasing full details of the damages being paid out through the new service as it is waiting on further data to become available before it starts publishing these details.
We do know, however, that claims are settling at a much lower average than the Claims Portal, even before the introduction of the OIC.
Indeed, the average settlement for unrepresented claims (excluding injury related additional losses and non- protocol vehicle costs) stood at £446 for non-tariff injury claims, £666 for claims settled under the pre-agreed tariff, with an average tariff uplift of £30.
For claims with representation, these figures stood at £420 (injury – non-tariff), £655 (tariff), and £15 (tariff uplift).
This will be welcome news to insurers who are already struggling with high levels of claims inflation as EVs become more popular and supply chain issues continue to drive up the cost of both labour and replacement parts.
More on that next time.Tweet