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 18 May 2008 00:09 BST

Personal injury claims soar

Thursday, 08 May 2008 17:10
Personal injury claims are proving costly for motor insurers

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Despite a reduction in overall accidents on the road, insurers are facing higher claims driven by the rising cost of personal injury to drivers, a report has found.

Total claims bill facing motor insurers will increase 28 per cent from £8.5 billion in 2007 to £10.9 billion in 2012, with personal injury claims a major factor, a market analyst group has claimed.

According to a report from Datamonitor, personal injury claims arising from road traffic accidents remain the single largest contributor to claims inflation with total motor claims costs forecast to reach £10.9 billion by 2012.

Between 2002 and 2006 the total number of accidents fell from 222,000 to 189,000.

However, the average claim paid to an injured party increased from £4,277 in 2002 to £5,331 in 2006 – increasing the average motor claim cost to £1,636 in 2006.

Datamonitor financial services analyst, Mahreen Hussein, said: "Personal injury claims continue to constitute the largest bill for motor insurers.

"Strong rates of inflation relating to medical costs and legal costs are the primary reason behind escalating bodily injury costs which have grown significantly in recent years."End of story

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