Karen Beales: OIC portal challenges offer opportunities around legal expenses insurance

Karen Beales, managing director of legal expenses insurer Financial and Legal Insurance (FLI), is on a mission to “diversify” the firm’s proposition ”into products that offer longevity” and consider brokers’ “needs for everything” when it comes to legal expenses insurance (LEI) and motor ancillary covers.

This product expansion has been triggered by the “challenges” surrounding the implementation of the Official Injury Claim (OIC) portal, Beales tells Insurance Times.

The OIC portal was launched in May 2021 as part of the UK government’s Whiplash Injury Regulations 2021.

This legislation aimed to empower litigants in person (LiPs) to process their own whiplash injury claims following a road traffic accident, in cases where the claim is valued at £5,000 or less.

The service is run by the Motor Insurers’ Bureau on behalf of the Ministry of Justice.

Since the OIC portal’s introduction, however, insurance leaders have been critical about whether the platform is delivering a positive impact.

For example, in June 2022, Cristina Nestares, chief executive of UK insurance at Admiral and deputy president of the ABI, said ”there is still lots of uncertainty” around the portal’s successful usage.

These industry-wide fears around whether LiPs are able to easily use the OIC portal appear to be confirmed in the service’s latest batch of data, published in April 2022.

This revealed that only 9% of claimants that had a claim sitting on the OIC portal between December 2021 and March 2022 were unrepresented, compared to 91% who were helped to make a claim by professionals, such as lawyers.

Beales notes that the OIC portal’s launch ”wasn’t publicised particularly well when it was introduced, so there’s a lack of awareness by somebody who has had a claim”.

She continues: “It’s [also] a complex area. As laypeople, we don’t understand the law in that sense. To expect a claimant to fill that in and then go through the whole process without a lot of guidance is just very difficult.”

Therefore, due to brokers “not knowing how the [OIC] portal will perform”, Beales says she wants FLI to become a hub for LEI and motor ancillary products, so that brokers can come to one place to “mix and match” policies for customers that can support them with the process of making a claim via the OIC portal.

Buying into BTE cover

FLI was established in 1995, offering before the event (BTE) legal expenses insurance. It then added after the event (ATE) LEI to its portfolio following the introduction of the Access to Justice Act in 1999, which replaced the legal aid system in England and Wales.

Now, FLI also provides motor ancillary products - like tyre, alloy wheel, MOT and windscreen insurance - after receiving the required regulatory approval to offer these covers at the end of 2021.

Historically, these insurances would have been sold by motor dealers, however Beales believes brokers are increasingly seeking these types of policies because they “are more understanding of the product and appreciate the value of it”.

“People are genuinely buying more BTE,” she says.

This trend is demonstrated by the insurer’s own customer stats - in the last 12 months, the number of FLI’s BTE insurance customers has grown from 700,000 to 1.5 million. Beales adds that FLI wants these customer numbers to reach around 2 million by the end of the year.

For Beales, legal expenses insurance is often avoided by mainstream insurers because it has typically been viewed by these firms as more of a legal service, as opposed to an insurance product. Plus, “premiums are not enough to warrant insurers specialising in that area”.

She says: “Going forward, hopefully more people will buy BTE legal expenses cover because then, if you’ve had an accident, you won’t need to go onto the [OIC] portal to make your claim [yourself] because your BTE insurer will then take the claim over.

“By being able to offer motor ancillary [products], it means that [brokers] can come to us and have all of those products with one partner instead of having to go to perhaps two or three different ones.

“The last things brokers want to do is have to ring 10 companies and get nos from eight of them - you just want to focus on those two that say yes. We can do that.” 

Beales, who was previously UK General Insurance’s chief executive, initially wanted to become a radiographer. However, what has kept her in the insurance industry for over 30 years is the divergent and “people driven” nature of sector, she adds.