A look at the current and future claims landscape
01/14/2021
2020 began with several weather events but we soon started to see new types of claims emerging as a result of Covid-19 lockdowns and a significant drop in most other claim types. Once lockdown restrictions eased in early summer, claims volumes began to return to normal, but at different rates.
Zurich’s claims experts spoke at our recent Customer Week about some of the current 2020 trends as well as future trends we can expect to see in 2021.
Potential claims trends in 2021
Michael Ward, Claims Analytics Actuary, said: “If we look at employers’ liability, we're anticipating more of a change in the mix of the claims that we expect to see, rather than any significant increase or decrease in volume. We know following a customer survey, that this is mostly due to the number of people now working from home. We can anticipate a shift from workplace injuries like slips and trips, to more stress related and postural issues caused by inappropriate workstation setups and ‘techno stress’.
“Within the public liability space, we expect a decrease in claims, as fewer events are being held. Also staying within public liability, pothole claims form a significant volume of this portfolio. As maintenance has had to be put on hold in certain areas due to restricted movements and financial pressures caused by the pandemic - roads could become a really big concern.”
A major issue throughout 2020 has been losses caused by escape of water. The weather remains the biggest driver in property claims, as UK storms continue to bring more volatile weather patterns. Inflation and the cost of claims may be driven upwards by the increased cost of materials and labour as a result of Brexit.
If we look at motor claims, we see very different trends. If we look at the number of claims we expect to receive versus the average cost of these claims – the numbers are falling, but there is a dramatic increase in the costs of repairing vehicles. And we expect that to continue - we'll get a lower claims rate in 2021 as well, because of the increasing use of Advanced driver-assistance systems (ADAS) technology. ADAS technology is advanced driver automated software and it's the term for all the sophisticated automatic driving features on modern vehicles, which help improve safety and reduce the number of accidents.
The other main factor here is the whiplash reforms that are expected to come into force in April 2021. These reforms are set to help control the cost of whiplash claims and impose restrictions, such as the requirement of a medical report before being able to accept an offer on a whiplash claim. However, given the current political landscape, there may be further delays in the implementation of this.
Injury in the workplace, claims and Coronavirus
Dan Corbett, Head of Employers’ Liability Casualty Claims at Zurich, said: “So far we've seen over 3.2 million known cases of Covid-19 in the UK. Zurich has been agile from day one, in order to prepare for a flood of Covid related claims - however, less than 200 notifications have been received to date. The reasons for this are thought to be mainly liability and causation hurdles - there'll be a need to establish clear weaknesses in procedures and practices. Also, in terms of causation, it is very difficult to accurately identify the source of Coronavirus in any person.”
Michael White, Head of Casualty Claims at Zurich, said: “Employees need to be given the tools to be able to assess their own environment and to report back to the employer. We have already had one claim for a bad back arising from the delayed provision of an office chair – that meant the employee was allegedly forced to use a dining room chair for a prolonged period. In addition to this, we're likely to see issues arising from display equipment, such as laptops and second screens. In turn, there could also be issues with work related upper limb disorder.”
Is Covid-19 likely to result in an increase in occupational stress claims?
Michael White said: “Proactive steps should be taken by employers to manage stress. Pre-Covid-19, it's important to note that stress was already the top cause of workplace absence in the UK. But with the advent of the crisis, there are additional factors to consider which may exacerbate the problem. For example, we have people with increased childcare or home-schooling requirements.
Employers need to be more alert than ever to stress, which requires a proactive culture to identify and manage. We need to be aware that in many home-working environments, employers will have IT tools that will explain just how much an employee is working, what type of work they are doing and what breaks they're taking, such as to warn the employer that an employee may be at risk of a stress related condition, particularly if their behaviour simultaneously alters.”
We are planning a webinar series in 2021 which will expand on these topics – keep an eye out for these being advertised in from January.
For more information about anything mentioned in this article please speak to your usual Zurich contact.
