Legal reforms helped cut third-party motor insurance claims for the first time in a decade last year.
The Institute and Faculty of Actuaries stated that claims fell by 10% in 2013, with the cost of claims falling 33% from £354m to £238m.
The number of claimants per claim dropped 4% from 1.6 to 1.5, with the average cost per claimant down from £5,000 to £4,750.
2013 featured a number of reforms to the sector, including the ban on referral fees and a 60% fee reduction for lawyers handling small claims.
David Brown, co-author of the IFoA report said: ‘Legal changes in 2013, most significantly the Legal Aid, Sentencing and Punishment Offenders Act– known as LASPO – appear to have had a significant impact on motor insurance injury claims.’
The average third-party motor insurance premium fell by 19% during the period. Brown said it was ‘clear that the motor insurance industry anticipated the impact of legal changes and has already passed on the reduction in costs to consumers’.
The findings came as leading car insurer Aviva said it is winning three out of four cases it challenges on customers’ behalf.
The firm, which has admitted in the past that just 2% of claims are bogus, today released a statement announcing it has saved almost £50m fighting what it called ‘spurious’ whiplash claims since 2005. Aviva says it has won 216 cases this year relating to low-speed whiplash claims.
The statement follows a court ruling in the case of Andrew Fish v Patrick Hillman, in which the judge dismissed the claim after finding the claimant to be an ‘inconsistent and dishonest’ witness.
Since last year, claimants have been protected by qualified one-way costs shifting except in cases where the claim was ‘fundamentally dishonest’. In this case, the claimant was ordered to pay the defence costs.
Howard Grand, head of legal for Aviva UK&I General Insurance, said: ‘This important case serves as a clear warning to those considering submitting exaggerated and fraudulent whiplash claims.
‘Aviva will support its customers in challenging these claims, and is increasingly successful in doing so.’