Claims fight fund idea lacks ABI support.
Garwyn boss Declan Treanor had good intentions when he called for insurers to build a “fighting fund” to battle claims test cases. But just like when AXA’s David Williams tried to revive the call for an insurer-funded anti-fraud advertising campaign in November, the ABI has shown little interest – perhaps for good reason.
Treanor wants insurers to have access to an ABI-controlled pot of money they can use to challenge all sizes of cases – even small ones, provided they can set some sort of precedent.
There are bound to be some claims cases that should have been challenged but weren’t, either because an insurer didn’t want the hassle or wasn’t prepared to pay the legal costs. But Treanor’s idea fails to address the same problem that forced the ABI to scrap plans for the national anti-fraud advertising fund: who’s going to pay for it?
Inevitably, bigger insurers would end up footing the bill. And these are the same insurers that can afford to take on almost any case they wanted anyway. They don’t need a fund, and the insurers that do need a fund can’t afford to pay much into it.
Treanor told Insurance Times he would consult his technical director about potential solutions. But Justin Jacobs, head of liability, motor and risk pricing for the ABI, will need far more convincing.
“If [insurers] feel a case needs further litigation or needs to be contested in the courts, then I think insurers are happy to do that when it is appropriate . . . I think insurers are better to make that decision than we are.”
Meanwhile, the idea for the national anti-fraud advertising campaign was abandoned by the ABI in 2007. Then, in November, AXA’s Williams, managing director of claims, resurrected the idea – a strategy he said is successful in Ireland and America. The ABI said it would keep the option open but for now, has decided it would be too expensive for members.
