Last month, the AA revealed that premiums are going up at the quickest rate for almost a decade and one expert has indicated that these external pressures could be a contributing factor.
Association of British Insurers spokesperson Malcolm Tarling said that personal injury claims are a “major” issue for the sector and revealed they cost firms a total of £9.6 billion last year – up £400 million from 2007.
“Legal costs are at a disproportionate level,” he remarked. “For every £1 on average that insurers pay out on personal injury claims they are paying out an extra 40p on legal fees.”
Mr Tarling claimed this is an area where companies can and would like to reduce expenditure, adding that his organisation believes many cases can be settled without lawyers and without reducing the amount of compensation paid.