Short version:
English insurers who crying about "too many claims" - have been caught actually selling to ambulance chasers!
...Some then used the excuse for hiking up prices - that they were being sued too much!!!!
Long version:
Motor insurance companies have been selling on the personal details of their customers to claims-management companies and “ambulance chasing” lawyers.
Insurers have been trading in customer details, in the knowledge that this has contributed to a dramatic rise in claims, particularly for personal injury, and increasingly widespread instances of fraud, concludes a damning investigation by Jack Straw, the MP for Blackburn and former Justice Secretary.
Insurers fuel the claims, even though they force up their costs because the referral fees provide vital revenue — between £200 and £1,000 per name.
At the heart of the scandal are personal injury claims, the cost of which has doubled in ten years from £7 billion to £14 billion. This is despite a fall in the number of road accidents involving personal injury. The increased costs are then passed on to motorists in the form of higher premiums.
Many of the claims are for whiplash, an injury that no scan or X-ray can detect. The cost to the insurance industry of claims for whiplash is £2 billion, yet the cost to the NHS of treating whiplash injuries is just £8 million.
The scandal came to light as a result of investigations by Mr Straw into complaints from his constituents. He confronted two big insurers, which admitted that they were releasing personal data to claims companies. Mr Straw discovered that his constituency was one of many hotspots where insurance costs had soared. Insurance industry analysis shows a link between hotspots and the claims companies in the area. “This is not a system; it’s a racket,” he said. “The sooner it’s ended, the better it will be for the law-abiding motorist.”
He has passed on his findings to Christopher Graham, the Information Commissioner, who is investigating possible breaches of data protection law. Louise Ellman, who chairs the Transport Select Committee, said she would be raising the issue in Parliament. “This makes a strong case for a ban on referral fees,” she said.
As part of a wide-reaching probe into the “dysfunctional” market for personal injury insurance, Mr Straw has established that motor insurance companies have been selling on the personal details of customers to claims management firms and “ambulance chasing” lawyers. His report also reveals that:
• Unscrupulous advisers have been exploiting lax rules on proving “whiplash” injuries to drive a sharp increase in claims and payouts.
• Insurers, many trading at a loss, have ramped up premiums for households in areas where personal injury claims, even legitimate ones, are rife.
• The police and hospitals have been collecting fees for passing on insurance customers’ personal contact details.
Writing in The Times today, Mr Straw calls for restrictions on the trading of individuals’ personal information. He says that the rules on whiplash should be tightened so that insurance claims can be made only when there is real evidence of injury.
He also says that claims management companies should be much more tightly regulated and he demands a ban on so-called referral fees, where companies from insurers to roadside rescue businesses charge for passing on customer details.
But in comments likely to prompt anger among hard-pressed householders who have seen their car premiums rocket by almost one-third this year alone, Mr Straw reveals how an industry executive admitted their role in passing on details of potential claimants.
He writes: “I went to see the Association of British Insurers (ABI), and senior executives of two of Britain’s largest motor insurers. I asked them. A long pause, a look of embarrassment.
“Then, said one of these executives: ‘This is the industry’s dirty secret. It’s we, the insurance companies, who sell on this personal information.’”
Speaking to The Times, Mr Straw said: “It is gobsmacking. The insurers are complicit in something that is against their interests. In my view, what they are doing, in principle, is contrary to the spirit of data protection.”
Mr Straw has written to Christopher Graham, the Information Commissioner, with his concerns. The commissioner, who has recently been granted wider powers, has agreed to examine whether consumer rights are being abused.
Mr Straw said that wholesale reform of the personal injury market was urgently required. “It is the economics of a madhouse, where the law-abiding public is penalised,” he added.
Mr Straw’s findings have sparked a call by Louise Ellman, the chairman of the Transport Select Committee, for a parliamentary debate on the costs of the car insurance market, specifically to involve a discussion of his report.
They also prompted the insurance industry to renew its call for a complete ban on referral fees.
Nick Starling, the director of general insurance and health at the Association of British Insurers, said that his members were caught in a “pernicious cycle”. He told The Times: “Everyone is doing this; it’s not just the insurance industry.” The providers of replacement vehicles, garages, hospitals and the police were all profiting from the referral fee system, Mr Starling said.
“The ABI’s clear position is that referral fees should be banned. but the industry can’t do it by themselves,” he added.
Mr Starling dismissed as “nonsense” reports that insurers were receiving £4.7 billion in referral fees each year.
Mr Straw was inspired to carry out his investigation after voters in his Blackburn constituency began to complain of sharply increased car premiums. His close friend, Phil Riley, was also bombarded with phone calls and text messages urging him to pursue an injury claim after an accident, despite him being unhurt.
Mr Straw used his parliamentary researcher and borrowed a statistician from the House of Commons library to carry out analysis on information that was mostly in the public domain but had never before been analysed so comprehensively. He also worked closely with the ABI, which provided him with local data on premiums that linked postcodes with high personal injury claims to far higher premiums.
Mr Straw set out to question why law-abiding motorists were not benefiting from safer roads, reduced accidents and fewer vehicle thefts. Car insurance premiums, up 30 per cent in the past year, according to the AA, could rise by another 50 per cent, accountants at Mazars said last week. Young drivers could see their annual premiums jump from £2,400 to as much as £3,600.
Despite the higher premiums, the insurance industry lost a collective £2 billion last year, according to Deloitte.
Fraud, particularly involving personal injury claims, is at the heart of the problem, the insurers argue.
According to a report by the transport committee, personal injury claims have soared by 70 per cent, from an average of just under 400,000 between 2000 and 2005, to 675,000 in 2009-10.
General insurance fraud costs the industry £2 billion and adds £44 to every household’s annual insurance bill, according to the ABI.
Report from Todays Times (England)
The irony of it is just mind bending.
The fact that they would do something supposedly so in opposite to what they actually say they don't want, is head scratching!
I've no idea if this practise extends to Ireland (a lot of things England does, we seem to eventually practise or do also) but if a modicum of this type of going on, is carrying on, it certainly is doing themselves no good.
...And customers are left to eventually pay higher prices in vehicle insurance.
