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Reform in insurance claim payouts needed, claims Norwich Union

08 December 2004
Norwich Union has said that reform is needed in the personal injury claims industry.

It points to increasing numbers of "frivolous" claims, pushing up insurance premiums for the general public.

This increase in claims is spurred on by no-win no-fee claims handling firms, which advertise on television and charge the insurer exorbitant costs when they win a case.

Norwich Union's director of technical claims, Dominic Clayden, said: "Claims management companies and solicitors have exploited the public's expectations in terms of what is compensatable and the amounts that might be achieved.

"The inevitable consequences have been an increase in frivolous and vexatious claims, and an explosion in claimant's [legal] costs. The latter now represents 40 per cent of all payouts.

"During the last year we have been working hard to raise the national debate around the cost and process of compensating people for personal injury and to show that the current system is slow, costly and inefficient."

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