The 2018 Civil Liability Act is expected to take effect in April this year and is set to transform the handling of low-value personal injury claims in England and Wales. The Act seeks to control the growth of motor insurance premiums for “ordinary” motorists by reducing the cost of whiplash injury claims. But uncertainties remain over how and exactly when the legislation will take effect, and many in the insurance industry are bracing themselves for impact.
The reforms are not a prerequisite to tackling low-value personal injury claims. Insurers can refine their systems and processes now to reduce the cost of claims and help prepare for the future.
Integrating automation capabilities now into claims departments offers these key advantages:
- Greater operational efficiencies can reduce the number of manual touches involved in handling claims.
- Improved consistency and fairness in customer experience and compensation can be achieved with automated capture and analysis of claims data, which ultimately accelerates time to settlement. Insurers can harness automation to capture and assess medical data, processing a greater volume of claims faster and more efficiently than through manual methods.
- Having “tried and tested” processes can minimise the business impact of a new “small claims track” portal if the April deadline is delayed. This would give insurers an opportunity to prepare, implement and embed new claims processes ahead of the inevitable future rush to achieve this.
We may have a clearer picture about reforms later this month. They may come into play in April as planned, but a delay to the implementation date is equally possible.
No Matter What, Systems Integration Will Be the Game Changer
Insurers could be risking costly delays without seamless integration of their systems with both the new and existing portals. There is the very real possibility that otherwise minor claims submitted to the new portal could spiral out of control in terms of attributed costs over time. This could then require claims to be manually escalated to and processed via the existing portal.
Insurers who operate disparate claims management entirely separate from the new portal, however it is designed, will also find reporting results to the government a significant challenge, while the power to capture, process and analyse granular claims data will also be vital to identify industry trends. Consistent data capture, cleansing and formatting will all be crucial to fulfilling industry reporting obligations.
Unintended Reform Consequences Fuel Uncertainty
The proposed “litigant in person” portal for claims valued under £5,000 may prove challenging for a variety of claimants, such as some non-native English speakers, anyone with limited computer skills and those who simply find the process and terminology confusing. Without the advice and guidance that would otherwise have been provided through legal representation, the burden could lie with the insurer to ensure and demonstrate customers continue to be fairly treated and do not become frustrated or reluctant to submit claims – the opposite of the stated intention to make the claims process easier for litigants in person.
If the reforms are implemented as planned, we may also see claim displacement, particularly an increase in the number of small claims involving non-whiplash injuries. Claims of tinnitus – a hard-to-verify ear condition where sufferers hear invasive noises with no external cause – could be a case in point.
Put Automation at the Core of Claims Processing
Despite all the uncertainty, the reforms continue to place a greater emphasis on the growing requirement for insurers to manage day-to-day claims effectively.
Using existing automation solutions, such as the Verisk suite of end-to-end solutions, will help insurers better handle any increase in operational demands caused by the reforms, with AI boosting the automated extraction and assessment of medical reports. Automation will also be key in ensuring that effective counter-fraud measures are in place to avoid greater leakage when pursuing a “right touch” claims processing strategy. Verisk has already helped insurers process more than 2 million claims through the seamless integration it provides into the existing claims portal.
