Secrets and lies – The dysfunctional car insurance meerkat (and other animals)

January 9, 2013/0 Comments/in , , , , , , , , /by

Monday’s Dispatches investigation on Channel 4, presented by Harry Wallop certainly packed a punch and was a welcome riposte to the insurance lobby’s PR deluge of misinformation, miscreancy and mendacity.

We hope it is the first of many broadsides in the fight to redress the balance in favour of the British public’s entirely reasonable expectation to be treated fairly by some of the world’s largest corporations.

Not much to ask you would think but these guys have had it their own way for so long now and have so successfully weasled their way into government circles that they are setting the insurance agenda for all of us. A concerted effort by the concerned is required NOW to identify the real villains of the piece and the true insurance scammers operating in this dysfunctional market.

In our opinion this documentary was a good first step because it exploded the myth that insurance companies are primarily concerned about us, their customers.

The film absolutely nailed the point that the insurance companies and accident management firms are only concerned about maximising their profit margins as they pressurise motorists to deal with their ‘approved’ body shops and pressurise the garages to carry out work at minimal cost., often using non-standard parts.

Now this would not in itself be such a problem if savings were shared between insurance companies and policy holders and work was carried out to a high standard but this does not happen…and our premiums go up and up.

Evidence from experienced people in the trade confirmed that the pressure insurance companies put on body shops to cut costs compromises the integrity of the damaged vehicle and the safety of the driver and their family.

The story gets worse.

If a driver is involved in a no-fault accident his/her insurance company will seek to max out the ‘value’ of the claim by shamelessly inflating the cost of the repairs and hitting the other side for all they are worth….and who pays for this?

Correct. We do every day.

Whilst the insurance companies are busy portraying themselves as ‘holier than thou’ and the nation’s protectors of the vulnerable, they are busily scamming the market for every penny they can extract from supplier rebates and other kickbacks and exploiting their customers without any regard to the principles of good business practice, far less business ethics.

The insurance companies then have the bare-faced audacity to stuff their own pockets with all this extra ‘bunce’ and then claim that innocent accident victims who have the temerity to claim compensation are responsible for the hike in premiums which the Office of Fair Trading (OFT) states are inflated to the tune of at least £250m per annum by the industry’s own malpractices.

Their underhand tactics have thankfully not gone completely unnoticed. The OFT has announced that it will be investigating the insurance market, despite the best efforts of a toadying government to foster the myth of a compensation culture and agree to virtually everything the Association of British Insurers (ABI) has demanded in recent years.

In typical weasel word fashion, as befits its modus operandi, the ABI claims that it welcomes an investigation. Aye right, we’ll see…as we live in hope.

Meanwhile, we are still waiting for the ABI to explain why its members are paying out on claims known to be fraudulent.

If a claim is known to be fraudulent why does the industry not take action to prosecute the fradusters? The conclusion must be that the insurance companies are spending a hefty chunk of our car insurance premiums on fraudulent claims. Perhaps the ABI’s Nick Starling can explain why this SCANDAL is allowed to go on unchecked.

Could it be that there are far fewer fraudulent claims than suits the ABI position and that the creation of the ‘bogeyman’ of an insurance fraudster is a very useful whipping boy when it comes to peddling lies about whiplash claims and the impact on premiums?

We will be asking the OFT to look at this matter very closely…and checking with Harry Wallop to see if he is planning to look at the government’s and the insurance industry’s perverse approach to dealing with personal injury claims.

Written by Andy Thorogood, Business Development Manager, Bonnar Accident Law.

 

RoSPA ‘hits the nail on the head’ in ground-breaking analysis of accident statistics

November 9, 2012/0 Comments/in , , , , , , /by

In a ground-breaking review of government statistics, The Royal Society for the Prevention of Accidents (RoSPA) says the ‘true impact’ of accidents is hidden.

According to the charity, there should be a “fundamental re-appraisal” of government public health priorities with a focus on premature and preventable deaths. On that basis, action to curb accidents should be the number one priority, it says.

Official figures show accidents account for just 2% of deaths in England and Wales – far behind cancer, and heart and respiratory disease, but RoSPA says this conceals the true impact of unintentional injuries in a report drawing on data from the Office for National Statistics to argue for a new approach to public health.

“We are faced with an accident epidemic that’s wiping out people in their prime”

Tom Mullarkey, Chief Executive, RoSPA

 

The charity calculated the years of life lost as a result of premature death, based on the average number of years which those who died could have been expected to live.

This moved accidents up the priority list, because many victims die young.

RoSPA then filtered out deaths which could not have been prevented.

THE KEY FINDING:

RoSPA found that up to the age of 60, accidents were the leading cause of preventable years of life lost, accounting for 23% of the total.

 

On the back of this extremely important finding we ask the government and the insurance industry two simple questions…

Where’s the ‘compensation culture’ in these figures?

Why are you intent on dismantling health and safety regulations in the UK when people are dying from preventable accidents?

RoSPA’s chief executive, Tom Mullarkey, says this is one of the most important findings in its 95-year history.

He says there is a “moral obligation” to prevent people dying before their time.

“We all know about diseases and the resources that are pumped into preventing the deaths they cause, but if only a fraction of that resource was used to prevent accidents we would not be faced, as we are today, with an accident epidemic that’s wiping out people in their prime.”

The charity says schemes to prevent accidents achieve quick results and can generate huge savings for the NHS. It wants extra support and information for people at key moments in their lives – including teenagers, parents and carers of young children, and people over 65.

RoSPA states that in England alone £1bn each year should be set aside to achieve this. The charity estimates that currently less than £1m is spent annually on these schemes.

In a statement, the Department of Health insisted that accident prevention was a key part of its approach to public health….aye, right.

In the light of government attacks on worker health and safety and a general downgrading of risk assessment and accident prevention, we can only hope that RoSPA’s voice is heard above the din of the insurance industry wailing about the costs of saving people’s lives…

This report should be required reading at Cabinet level and hopefully will be an antidote to the relentless dismantling of the nation’s health and safety regualtions.

“Pieces of eight…pieces of eight…” – Pirate ship or flag of convenience as Admiral ponders legal launch?

December 12, 2011/0 Comments/in , , , , , /by

Photo: The Telegraph

Is it now any port in a storm for under-pressure insurer Admiral?

Saturday’s Telegraph reported that Admiral, the FTSE 100 motor insurer, is considering branching into the legal sector as it “faces up to the loss of the lucrative referral fees that generate millions of pounds in profits each year.”
 
According to industry insiders, Admiral must move quickly to replace the loss of income from the fees paid to insurers for information of potential personal injury claimants. 

The Cardiff-based group is exploring plans either to set up its own personal injury law firm where it could potentially direct customers with claims or become a majority backer in one, following the implementation of the Legal Services Act in October this year., when the implementation of “Tesco law” widened the provision of legal services to new investors including retailers, banks, insurers and outsourcing companies – The Four Horsemen of the Apocalypse as far as independent legal advice in the UK is concerned. 

However, as the story of Britain’s over-hyped, and mythical so-called compensation culture rumbles on, insurance companies are becoming increasingly uncomfortable when quizzed about their involvement in various referral fee schemes…and Admiral seems to be no different. We wonder why.

Despite periodic denials that it sells client information, according to official Admiral sources, about 5.6% of its overall profits come from these fees. So who are we to believe when Admiral contradicts its own statements?

Speaking after the referral fee ban was announced in September, the company said: “Admiral does not sell customer data; if one of our policyholders has a non-fault accident, suffers a bodily injury and they require assistance, we will put them in touch with a personal injury lawyer.” So what about the income from referral fees then?

Admiral would not be the first insurer to push into the legal industry. Axa owns Knight Legal Services, a defendant law firm. It has always denied it refers its customers to Knight Legal Services and says it has no plans to start doing so…but what will happen if insuers own law firms?

How can injured people be confident that their accident compensation claims will be handled fairly and with their best interests at heart? It might be tricky to find independent legal advice when the representatives of those causing injury are also investors in law firms that pursue claimants’ rights, or even worse perhaps, set up theit own personal injury law firms…

It would appear that Admiral’s plans are at an early stage and are one of several being considered. However, the news is likely to raise eyebrows across the City with Admiral’s shares having fallen heavily in recent months. A case of who’s next?

So me hearties, let’s observe this “rum do” as they set sail on a steady course for berating personal injury lawyers, stigmatising their clients, perpetuating the myth of a compensation culture and,

oh yes,    …becoming personal injury lawyers themselves??

Can all this be about profit and an attempt to make a flawed business model work? Well, it’s not quite “Neverland”, but you can see it on the horizon, allegedly…

 

 

Lord Young of ‘Gaffem’ back in favour at Number 10

October 31, 2011/0 Comments/in , , , , /by

Good news and bad news for worker safety in the UK

Bad news: Lord Young is back

Good news: there is no good news, well not much anyway… 

Getty Images

‘Never had it so good’ peer Lord Young of Graffam returned to Downing Street last week on Prime Minister’s Mates’ Service or PIMMS… 

His mission, having chosen to accept it, is to help businesses thrive by ridding them of red tape and stifling health and safety regulations.

Thus a fundamentally flawed premise is enshrined in the noble Lord’s brief – Health & Safety costs money and costs jobs.   

In stark contrast to the UK’s government’s stance on health and safety in the workplace, David Michaels, assistant secretary of labor for the US Department of Labor’s Occupational Safety and Health Administration (OSHA), said on 15th February this year:

‘Despite concerns about the effect of regulation on American business, there is clear evidence that OSHA’s commonsense regulations have made working conditions in this country today far safer than 40 years ago when the agency was created, while at the same time protecting American jobs.’

Unfazed by the irony in resurrecting Lord Young’s career in the run up to Halloween, Number 10 officials have set up a new office for the 79-year-old peer who will spearhead a new push to remove barriers to growth for small and medium size companies.

His focus will be on working to ensure businesses are not stifled by regulation and he will look closely at the way health and safety rules impact on firms.

No agenda there then?

Last year his report Common sense, Common Safety, was welcomed by Mr. Cameron who has asked the Conservative peer to cut through the rule book and see where ministers can help businesses.

Unfortunately neither Mr. Cameron, the insurance industry lobby nor the bulk of commentators who regularly line up to vilify accident victims actually noticed that Lord Young didn’t agree with them…

For the record, this is what he said on page 19 of ‘Common Sense, Common Safety’:

Britain’s ‘compensation culture’ is fuelled by media stories about individuals receiving large compensation payouts for personal injury claims…

The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality…

The public believes that the number of claims and the amount paid out in damages have also risen significantly.

The really unfortunate thing however is that Lord Young singularly failed to get this ‘common sense’ message across.

He wrote that the compensation culture is more myth than reality yet he remained mute and supine on the core issue when the report’s findings were made public. Perhaps this is why he is so suited to the task of fixing the non-problem of the ‘burden’ of Health & Safety legislation? 

Last November Lord Young of Gaffem pronounced:

For the vast majority of people in the country today, they have never had it so good ever since this recession – this so-called recession – started…”

We await with baited breath, his magisterial musings on the tiresome burden imposed by laws designed to keep people safe and well at work in the UK.

However, Mr. Cameron has clearly decided Lord Young has served his time and will welcome him back…just when we thought he had gone for good last October…  

 So farewell then Lord Young of Gaffem. 

 You resigned after you made a gaffe.

 You claimed that most people had ‘never had it so good.’ 

 Unfortunately this just isn’t true,

 Like much of your ‘Common Sense Common Safety’ review.

 Adieu.

But not so fast, the prodigal returns.

Expect many more workplace cuts, crushes, crashes and burns.  

Jack Straw aimed a kick at the wrong target when he bemoaned activities of claims companies and lawyers in referral fee investigation.

October 17, 2011/0 Comments/in , , , , , /by

 

Thus, at a stroke, Djanogly kicked into touch the key finding of Lord Young’s 2010 report on the Compensation Culture (see our other blog posts) i.e. that there is no compensation culture (page 26 of the report) – it is the figment of the popular press’ imagination, aided and abetted by the insurance industry. 

 

 

Mr. Straw, the Labour MP for Blackburn, said the scandal was hitting ‘perfectly law-abiding people’ with sky-high insurance costs…

 

and what about the perfectly law-abiding people who will find their access to justice cut off?

 

Mr. Straw, whose own investigation (bit of a ‘cult of Jack’ going on here) into how even the police are taking tip-fees, prompted the select committee to re-open its earlier enquiry, said: ‘What I am clear about is that of a total of about £9billion premium income, £2billion is costs caused by people who can be accurately be classed as the parasites in the system.

 

How is he clear about this again? Didn’t HE read Lord Young’s report?

 

Mr. Straw told MPs that the previous night, while he was preparing his evidence to the committee, he had been phoned at home by a claims accident company seeking to represent him over an alleged accident  in the last three years: ’I’d not had an accident in the last three years,’ he told MPs.

‘But it shows the relentless pressure inside these very dodgy firms.’

 

Yes Jack, but you like countless others did not claim, nay COULD NOT CLAIM BECAUSE YOU HADN’T HAD AN ACCIDENT – GEDDITT?

 

Mr. Straw added: ‘Claims management companies are parasitic. In any other walk of life, we would describe this racket by referral companies as bribery.

‘These practices are leading to very substantial (insurance) increases on law-abiding motorists.’

 

Jonathan Djanogly said the Government intended to band the ‘merry-go-round’ of referral fees which have sent premiums rocketing.

 

He noted: ‘You only have to turn on daytime TV to see lots of dodgy solicitors’ firms which are part of this racket.’ He said there were two firms of solicitors within 100 yards of his own front door offering ‘£600 for a referral.’

 

Memo to Justice Secretary:

If dodgy solicitors are advertising on tv, then bring them to justice now!! Haven’t you heard about the Advertising Standards Authority?

 

Justice Minister Jonathan Djanogly told the committee the Government’s decision to ban the ‘merry-go-round’ of referral fees was ‘appropriate’ and had been ‘generally welcomed’.

 

Referral fees were part of the ‘sick, suing culture’ that was keeping premiums artificially high: ‘We want the benefit to feed through to the consumer in the form of lower premiums.’…and fair compensation settlements!!! 

 

He believed the Government’s reforms would bring commons sense to the system by weeding out greedy claims, noting how under the current system: ‘If you are a claimant and have no chance of losing, you are almost crazy not to sue. Why wouldn’t you? That’s what we propose to reverse.’ 

 

This is getting rather tiresome. Will somebody PLEASE tell the UK Justice Minister that an injured person wishing to make a claim has to actually prove negligence? Ye gods – does he think that people claiming compensation just have to ask the insurance companies nicely?

 

Keen to get in on the act, or is it the feeding frenzy, roads Minister Mike Penning condemned the claims firms as ‘ambulance chasers’ noting: ‘As a human being I find it very difficult that any organisation would seek to profit from others’ injury. Yet fifty per cent of claims are personal injury claims.’ 

 

This comment is about as crass and unthinking as it is possible to get, even for a government minister.

 

Critics say soaring premiums are tempting some to drive uninsured – with an estimated 1.3 million drivers now on the road without insurance.

 

A word anyone about insurance company profit margins or their active participation in and encouragement of referral payment schemes?

 

MPs on the Transport select committee report have already condemned the current system as ‘dysfunctional’. We take it they mean the claiming ‘thing’ and not Mr. Djanogly’s department…although that story isn’t over yet, not by a long way.

 

Paul Evans, chief executive of insurance company AXA UK, said increases had slowed to about a 1 to 2% rise a month but added:’ we shall continue to see continuing increases in the months to come …

 

aye right enough, as he squeezes every ounce of profit out of claimants before his game is rumbled by a myopic government and an enraged public who aren’t as gullible as he thinks.