Future Impacts of Covid19 in Motor Claims
2 minute read | June 26, 2020
Our MD, Glen Eastwood, recently considered the likely future impacts of Covid19 upon the motor claims space. Here is what he had to say:
There can be no doubt that Covid19 has had a huge impact on the motor claims space. Less cars on the road leads to fewer accidents and therefore to a reduction in claims.
As the various restrictions are gradually eased and frequency begins to tick up, the question is where are we going with claims next?
To a degree, this exercise is crystal ball gazing, but in others, we have history to help us.
One thing is very clear. We are entering a recession and that very often brings challenges in the claims arena.
Here are a few of my thoughts on areas which may be impacted.
I think we can expect to see more fraud, both opportunistic and premeditated. Jobs are being lost and the economy is experiencing a sharp shock. There is every chance that some people will look for ways to bring in extra cash.
Extra vigilance is required to ensure that the right claims are processed efficiently and those where the circumstances or details don’t stack up will require further investigation.
I can see an increase in PI claims frequency. Not everyone claims for PI when injured just now, but again, when money is short, the temptation is likely to be there. More PI claims leads to an increase in average claims cost across the piece. I can also see companies re-working their old claims to see if this brings in further PI cases.
Covid19 has impacted various industries across the globe. One of those is manufacturing. There is a strong chance that vehicle repairs may take longer than usual due to a slowdown in the availability of parts. This in turn would negatively impact the speed of settlement and TP claims costs (credit hire claims, for example). Claims handlers will need to look for creative solutions to speed up the repair times.
If you’ve read my posts in the past, you’ll know I’m a huge advocate of TP Intervention. It’s something we do well here at MSL. I think it will be even more important over coming months and will help to counter some of the negative impacts which will certainly increase claims inflation.
H&S aspects are being impacted too by Covid19. Repairers and hire companies need to ensure that vehicles are properly cleaned prior to them being handed over to customers. It’s important in such instances that all parties take a sensible view as to costs involved to avoid unnecessary attritional costs when reaching settlement.
One final thought. I do think it’ll be some time before frequency returns to pre-virus levels. More people are working from home and are finding they can be just as productive and that they like it.
All of us in the claims arena are going to be watching carefully for new trends and unexpected consequences. Handlers will need to use all their experience to find solutions to new issues and a repeat of older challenges too.Back to resources