19/09/03

Andrew Briscoe, managing director, AA Insurance Services, has called on the insurance industry to lobby the government to bring spiralling compensation awards under control, many of which, he says, are out of proportion to claims being made.

He made the call at the Chartered Insurance Institute (CII) conference at the Queen Elizabeth II conference centre in Westminster on Thursday (18 September 2003) during a panel session, which sought to tackle some of the key issues facing the insurance industry.

“This isn’t just a problem for the insurance industry – it’s a problem for society,” he said.  “And I believe that the issue has been seriously underrated by successive governments. 

“We now have a culture where claims are being made that seek to apportion blame without individuals taking responsibility for their own actions.”

Briscoe points out that last year, over £10 billion was paid for personal injury claims and this is expected to grow by 15 per cent per year. 

“It is the insurance industry that takes all the pain.  As an industry, we must get better at feeding this experience back to the government.  Otherwise, we’ll simply follow the American experience where the culture seems to be to apportion blame first and claim compensation for often-trivial or frivolous events.  And the result, of course, it is that the insurance companies foot the bill and premiums spiral,” he says.

“We could get to a stage where insurance companies will simply not be able to afford to meet liability claims, and institutions and organisations will be unable to afford premiums.”

Briscoe pointed to the recent successful claim against a supermarket by a woman who slipped on a mushroom while shopping and broke her hip.  She was awarded £400,000 and, he says, this type of claim is becoming increasingly commonplace where courts make disproportionate awards in the knowledge that insurance companies are going to pay up. 

“The industry now has a great opportunity to lobby the government to put in place guidelines which will slow this increasing tide of ever-larger claims for compensation, where a degree of responsibility must lie with the claimant. 

“The industry must work in unison on this issue – because in the final analysis, it is the majority of customers who never make a compensation claim who will suffer.”

Provided by the AA