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Catch up with the latest press releases from LV=

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LV= welcomes Government consultation to implement whiplash reforms

Press release: 17/11/2016

Insurer to pass on all savings to consumers and calls for rapid implementation of proposals

LV=, the UK’s most trusted and recommended insurer, today (Thursday 17 November 2016) welcomes the Ministry of Justice’s consultation on reforms to compensation for minor whiplash injuries and is calling on Government to urgently implement the proposals.

Following Chancellor George Osborne’s promise in his 2015 Autumn Statement that Government would bring forward reforms to address “the compensation culture around minor motor accident injuries”, the Ministry of Justice (MoJ) has today published a consultation outlining the measures it will introduce to tackle the issue.

Martin Milliner, LV= General Insurance Claims Director, said: “LV= promised to pass on all savings from the 2015 Autumn Statement compensation crackdown to customers and that promise still stands. We welcome today’s consultation and look forward to working with Government on implementing the reforms – honest motorists and businesses should not have to keep paying the price for unnecessary whiplash claims. The UK is known as the “whiplash capital of the world” so it’s vital that Government implements these proposals without delay to ensure consumers can start getting a fairer deal as soon as possible.”

The extent of the problem and who it impacts:

Increasing costs of car insurance for consumers and business

  • The UK sees more compensation claims for whiplash per car accident than any other Western European country and known as having “weakest necks in Europe”.
  • Efforts by Government have had limited effect, personal injury claims are now at a record high. In the first quarter of 2015, personal injury claims made through the Ministry of Justice Claims Portal were the highest on record, with 13% more than in the same period for 2011/12, before LASPO was introduced.
  • 2015 claims data to date from LV= shows that 80% of all personal injury claims we received were related to whiplash.
  • LV= estimate that in 2015, at least 11% of our average car insurance premium can now be attributed to paying for whiplash claims, a significant and unnecessary cost for consumers.
  • At LV=, 10% of LV= claims handlers are employed purely to tackle fraudulent claims at an annual cost of 4.5 million a year to run the team.
  • These costs are ultimately paid for by customers, further increasing the cost of car insurance for individuals.
  • Business is also affected by rising commercial insurance premiums for company vehicles. For small businesses, in particular, this is an unwelcome and unnecessary cost.

Nuisance calls

  • Information Commissioner’s Office’s (ICO) received 180,000 nuisance call/text complaints in 2014 – 2015, a 12 per cent increase from the previous year.
  • According to LV= research, commissioned in July 2015, each Brit receives on average 468 nuisance calls and text messages every year wasting six and a half hours a year dodging calls, deleting texts and listening to phone messages.
  • One in three reported receiving more nuisance calls and texts than they do calls from friends and family and over 80% of those who receive personal injury calls have never even been involved in an accident for which they could claim.

Cost to GPs/NHS

  • Significant area of great concern is the additional pressure put on an already strained NHS by fraudulent claims.
  • LV= research carried out with GPs showed that they see 116,000 people every month they suspect are inventing or exaggerating an injury in order to claim compensation. This equates to close to a million GP hours being wasted every year.

Funding wider criminal activity

  • Some of the money generated by gangs involved in making fraudulent whiplash claims goes towards wider fund wider criminal activity, including terrorism.

For more information please contact:

Nicola Hussey, Head of Media

nicola.hussey@lv.com 0208 253 5238 / 07468 761128

About LV=

LV= employs over 6,000 people and serves over 5.8 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products. We are currently the UK’s number one brand for Insurance and Investments, according to the 2015 YouGov Brand Index Buzz Rankings.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations including ASDA and Nationwide Building Society.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.