Executive Summary

  • With the number of confirmed infections continuing to rise since the first reported cases in late December, COVID-19 is likely to impact businesses and individuals globally. With this comes a heightened exposure for the insurance market.
  • This document outlines our predictions for the likely impact of the pandemic on UK personal injury claims generally and also focuses more specifically on the following claims types:
    • Catastrophic injury
    • Liability
    • Motor
    • Fraud
  • The key trends we are expecting to see include:
    • Delay to claims and extended cycle times
    • An initial reduction in claims numbers during the lockdown period
    • The inflation of care claims
    • A higher risk of mortality for Claimants in catastrophic injury cases
    • Challenging circumstances to deal with loss of earnings claims
    • A potential increase in claims from businesses employing 'key workers' as they struggle to provide service continuity
    • Possible musculo-skeletal injury claims arising from homeworking
    • Potential for more requirements for long-term vehicle storage and longer repair periods
    • Increased opportunistic fraud and exaggeration on lower value claims, particularly if the whiplash reforms are further delayed

Clyde & Co will be sharing more detailed updates on some of the issues outlined in this document, over the coming weeks, as the likely impacts of COVID-19 for the insurance industry become clearer.

General claims trends

  • The volatility of the stock markets may prompt a reconsideration of the use of PPOs in catastrophic injury claims. It has recently been speculated that the judiciary could prompt an increase in the PPOs by enforcing their use in select cases, and the current situation may present such an opportunity. Such a move does transfer the risk back to insurers, who may not welcome holding additional risk on a long-term basis.
  • The inflation of care claims. Carers (whether family members or private) may be required to self-isolate for periods, and therefore, any agency coverage would be subject to a premium. By the same token, the unavailability of professional carers due to self-isolation may prompt a reduction in the value of care claims as family members are required to that on that role.
  • Claims for loss of earnings will require detailed consideration by defendant practitioners. Claimants may be required to self-isolation as a precautionary measure, some claimants may unfortunately lose their job as a result of mass unemployment or be required to take unpaid leave; however the Government's scheme to help ensure employers retain staff during any shutdown should reduce these occurrences. Nonetheless, the consequent prospects of obtaining new employment may also be diminished.
  • For those who are self-employed and have ongoing loss of earnings, it is unclear how any Government measures in respect of self-employed individuals will factor into claims. In addition, the Coronavirus Job Retention Scheme will need to be considered. If an individual is absent from work due to injury, yet is made redundant by their employer electing not to use the Scheme – will this affect a loss of earnings claim?
  • Access to rehabilitation for seriously injured claimants may be hindered. Planned Initial Needs Assessments will need to be postponed; visits by case managers may be curtailed; and therapies and interventions will be cancelled, and restarted after the crisis has abated.
  • As non-essential medical treatment is cancelled, including privately funded treatment, this will delay the recovery times from conditions.
  • Very seriously injured Claimants will be in the extremely vulnerable persons category, and therefore be subject to a higher risk of mortality from the virus itself, but also complications of their injuries or other infections. Should a situation arise where NHS staff are prioritising patients who need critical care, these seriously injured claimants may be lower down the priority list.
  • The psychological impact of self-isolation may be greater and impact on the claim: those who live alone and rely on socialising with family and friends, therapies and such like, those who reside on in-patient units where visiting is being extremely restricted.

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