Insurance Post Podcast

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It is the year 2030. As the demands for a green economy has intensified the government has announced the ban on selling new petrol, diesel or hybrid cars in the UK will be brought forward from 2035 to this year (2030). Concerns still exist over electric charge points, which although now standardised to two types, are seen by some as lagging behind vehicle manufacture.

Around 40% of the UK carpool is now classed as level three automation having ‘conditional automation’. A further 50% has levels four and five and are thus classed as ‘highly automated’ and ‘fully automated’ respectively. Interconnectivity between vehicles and other electronics owned by consumers is growing due to increased Internet of Things.

Vehicle ownership has stabilised, reducing to 40% in large cities and conurbations. E-mobility and mobility-as-a-service solutions have thrived here as people – especially those aged 25 to 40 – started to shun congested public transport in the wake of the Covid-19 pandemic in 2020.

Personal injury claims have significantly reduced as a result, but there is still a fervent market for claimant lawyers due to accidents resulting from accidents linked to the mixed carpool, as well as the rise in e-mobility solutions that are predominantly still controlled by drivers.

There have also been some extreme legal cases where fully autonomous vehicles have had to make an ethical call in terms of who to kill when put in a unusual situation. There have also been a number of accidents resulting from targeted vehicle hacks and public outrage over data leaks originating from cars.

Repair costs are still an issue, not least because the body shop network was decimated by the Covid-19 epidemic and numbers have fallen significantly. However, the market has consolidated and some major players have emerged the likes of which the sector has never seen before, with significant buying power and technological solutions. Around 60% of repairs are now notified by mobile apps at the first notification of loss, using AI to diagnose damage.

In terms of insurance products themselves, the OEMs have still not weighed in as much as might have been predicted by some; but the annual insurance policy is now only bought by 30% of the population as most people prefer usage based products – another legacy of the Covid-19 pandemic. These solutions are largely digital and mobile based.

Based on this hypothesis, Post content director Jonathan Swift sat down with the strategy director, Verisk Claims, Chris Sawford and managing director, Verisk Ireland, Niall Kavanagh to discuss the possible road map between now and the 2030 outlined above.

This includes the growth in automation/ADAS and the challenges that throws up in terms of the mixed car pool, the growth of IoT and what kind of infrastructure changes will be needed across the UK to prepare for the 2030 future outlined in the associated article.

The trio also look at how the evolution of technology from automation to advanced satnavs that identify safest routes from A to B will impact personal injury claims; and how vehicle usage and ownership is likely to change and what will be the catalysts for it.

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It is the year 2030. After a number of false starts the Government finally introduced its Whiplash reforms in April 2022 following delays due to the extended impact of Brexit and Covid 19.

It was considered in the main a success as the extra time allowed all sides to reach agreements on areas that had been seen as stumbling blocks like the inclusion of ADR. This was in part helped by the co-operation that begun during the pandemic including the personal injury protocol spearheaded by Thompsons Solicitors and the Association of British Insurers. The extra time also meant the portal was fitter for purpose than some sceptics expected.

‘Lay legal advisers' - in the form of so-called 'McKenzie Friends' - did not have as large as unintended consequence as some feared, but did prove a distraction until the Ministry of Justice followed Scotland's lead by introducing a ban on remuneration for them.

Another hangover from Covid-19 was that it sped up the use of remote trials/dispute resolution for personal injury claims, including the use of mediated joint settlement meetings before going to court. Although there remains concerns among some that they do not get the same access to justice remotely as in person, this has waned over the last decade.

Automation has also become prevalent in the settling of low value personal injury claims with over half now settled this way; including an increasing number whereby a claimant receives funds within the hour after a consultation with a doctor in person or remotely.

As mentioned in the first hypothesis and article [Motor] the increase in vehicle automation has seen a decrease in the number of personal injury claims related to motor. But CMCs – although reduced in number – have seen a new rich vain in claims farming involving people working from home injuring themselves and bringing claims against their employers. There has also been a rise in claims from accidents involving Mobility-As-A-Service vehicles such as e-Scooters. With the uptick in pedal bike usage post Covid-19 third party insurance is now compulsory for cyclists too.

When a vehicle does have an accident, ENOL means policyholders don’t have to notify their insurer as the vehicles does it for them. In many cases claims are settled through a hub whereby reciprocal agreements between insurers mean swifter payments for the insured.

These includes using apps to analyse the damage and ascertain liability almost immediately at the site of some accidents after a swift information exchange between the relevant carriers.

The market is due another review of the discount rate in early 2030 with the last review in 2025. After some exploration the Government rejected the possibility of a dual-rate five years ago, which would mean having a lower rate in the short term and a higher rate in the long term to safeguard vulnerable claimants, although the Lord Chancellor said this remained open to further discussion at the next review. The discount rate is presently at 0%.

Based on this hypothesis, Post content director Jonathan Swift sat down with Mark Hewitt, director, and Mark Strang, senior business developer, Verisk to discuss the possible path between now and the 2030 outlined in the associated article.

This includes the importance of the whiplash reforms, the growth in remote hearings, the increase in automation, the benefits of insurers being immediately notified electronically that a vehicle has been involved in an accident, and the evolving role of CMCs.

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