We were surprised to read recently, in the light of the analysis of the figures of car insurance claims ratio in 2016, that the reform introduced in 2015 on the road accident scale, which took effect from 1 January 2016, has significantly benefited insurers. And, along the way, it has particularly harmed the slightly injured.
The reform of the accident scale... What was it like?
As we explained in a post from months ago, in 2015 a reform of the road accident scale, whose main purpose was:
- Increasing compensation in case of injuries and very serious casualties (these increases in payments were very high in percentage terms compared to the previous scale).
- However, in claims involving minor personal injuries, The new schedule has been detrimental to the injured party.
- The evidentiary requirements of the damage, and its link to the road traffic accident.
It is common knowledge that the most common accident is the one causing minor damage. In contrast, the number of fatalities is below 10%.
Consequences on the motor insurance claims ratio
Faced with what was a foreseeable rise in compensation for injuries, or at least that is how it was sold to us, the companies raised the prices of car insurance, in their renewal of policies. We already mentioned it in this post, as did important newspapers such as the ABC, Expansion…
However, it has become clear after the close of 2016 that the accident rate has not gone up but down, for the reason we saw above. Insurance companies have paid out less in compensation to injured people than in 2015.
In fact, the offers made by insurance companies have been greatly reduced, so that legal proceedings have increased in the absence of an amicable settlement. This will lead to an increase in the cost of legal assistance.
The change in the accident rate will be felt at a later stage.
However, the companies do indicate that as a serious claim is delayed in time until compensation is paid, they state that the new schedule will be noticeable in the profit and loss accounts for 2017. We will be watching to see if this is really the case.
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