Annual figures show motor PI claims falling sharply in 2021

Annual figures published by the government have shown that the number of motor claims fell dramatically in 2021.

Motor injury claims reported to the Compensation Recovery Unit – considered to be one of the most accurate reflections of the claims sector – fell by almost 20% last year to 398,051.

In the same year the Civil Liability Act came in to force, reducing the damages available to successful claimants and requiring them to use a new portal, Official Injury Claim, for all claims worth less than £5,000.

The CRU figures were revealed after a freedom of information request by the Association of Consumer Support Organisations (ACSO) and show the full-year statistics for the first time.

Between October and December 2021, motor claims fell by almost 30% compared with the same period in 2020. The figures will be affected by Covid-related restrictions on travel, but overall there has been an annual drop of almost 40% in three years.

Matthew Maxwell Scott, executive director of ACSO, said the government had succeeded through the portal and new tariff levels in placing motor injury claims in a ‘state of permanent lockdown’. 

‘From the pre-pandemic mark of 653,893 claims in 2019, the incidence of motor injury claims has plummeted by a quarter of a million since, a drop of just under 40 per cent in three years,’ he said. ‘That is an astonishing reduction and will have had a significant impact on the amount of injury claims costs paid out by insurers.’

Maxwell Scott said the falling claims numbers were not reflected by any reduction in motorists’ car insurance premiums, with many consumers saying their insurance costs have gone up this year. He added: ‘As the cost of living soars, it is a nonsense that insurers should hold onto these excess profits without giving hard-pressed motorists a financial break, especially as the government’s own figures confirm a big drop in claims last year.’

The Association of British Insurers responded by saying figures show that the average private motor insurance premium paid is currently at its lowest in five years, as motorists benefit from a competitive motor insurance market.

Am ABI spokesman said: 'This in part reflected fewer claims during lockdowns, and despite cost pressures around rising average repair costs. Throughout the pandemic, motor insurers gave added support to their customers, including in some cases adjusting premiums to reflect lower mileage.

'The industry regulator the FCA has confirmed motor insurance premiums for some new customers could rise as a result of the recent motor and home insurance pricing reforms. The FCA also acknowledged that ‘overall firms providing home and motor insurance are profitable, although there is no evidence that these profits are excessive’.'

The CRU figures also show that clinical negligence claims leaped 37% during 2021 to 17,425. It is not clear what caused this increase, but the first lockdown appears to have been a factor.