Insurers must work together to improve consumer trust if they are to avoid outside regulation – ACSO

Insurers must collaborate more effectively to create a better functioning claims system for consumers if they are to avoid potential outside regulation.

This is according to Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations (ACSO).

ACSO was founded by Maxwell Scott and Ben Welsh in 2003 – it strives to represent the interests of consumers in the civil justice system, as well as the organisations that provide them with services.

Talking to Insurance Times, Maxwell Scott explained that insurers could collaborate much more effectively in areas such as sharing fraud data or agreeing upon processes for paying for personal injury claimants’ rehabilitation, for example.

ACSO is currently working with the Forum of Insurance Lawyers (Foil) to “agree the process, governance, pricing and ultimately how rehabilitation for road traffic accidents happens”.

Maxwell Scott explained: “Currently, it can depend slightly on the individual firm – it’s a big source of friction and litigation, even though these are small claims and even though a typical course of rehab for a whiplash type injury is very straightforward.

“There are some concerns that, perhaps, some rehab providers are fiddling the books and that some insurers are overly reluctant to pay for it in the first place.”

This reluctance on the part of insurers to pay out for rehabilitation treatment should be “an area of particular concern” for the sector, according to Maxwell Scott.

“[The UK government has] said that [it wants] the industry to come up with a long-term system that everyone can have confidence in,” he added.

In its response to Part Two of its Reforming the soft tissue injury (whiplash) claims process consultation – published in March 2022 – the government said it had “engaged regularly with a wide cross-section of the industry on the provision of rehabilitation”, enabling it to continue “productive dialogue with industry stakeholders, including insurers”.

Self-governing sector

If the insurance sector, with the help of representative bodies such as ACSO and Foil, were able to agree upon an efficient, workable system around rehabilitation provision and payment as part of the claims process, then government confidence and consumer trust in the sector would be bolstered, Maxwell Scott emphasised.

The general lesson here, he continued, is that insurers should attempt to lessen the extent to which their processes impact on the justice system.

“Wider industry can come together to avoid [unnecessary claims] going to court, which is just going to help the court system and mean that those cases that do have to go to court will be dealt with more promptly,” he said.

The latest data released by the HM Courts and Tribunals Service, published in February 2023 and covering the 12 months to December 2022, showed that the average time between a small claim being made and a first full hearing in court sat at just under a year – 49 weeks.

Cases with complications can take significantly longer than this and Maxwell Scott clarified that this data did not cover the cases that were settled out of court.

Were the insurance sector able to agree systems that minimised its contribution to court delays, then it could improve consumers’ and government’s confidence and trust in it.

“Underpinning the whole insurance industry is the notion that you can get access to justice. If - [because of court delays] - you can’t, it might mean that you are more likely to [be] offered a lower settlement,” Maxwell Scott explained.

“Undersettlements are an issue and a lot of people may give up claiming for small injuries the law allows them to make because it’s not worth their time.

“That’s [a negative impact on consumers’] trust and confidence in the sector, which might lead to regulation.

“It might mean that if we get a [new] government [following the next general election] that is less sensitive to the needs of the insurance industry and more sensitive to its customers, then insurers themselves might become the recipients of regulation or policy changes that they’re not very keen on.”

Avoiding this potential outside involvement would require collaboration between insurers to agree upon processes.

“[Insurers] should demonstrate that they can come up with solutions and work with the other side where possible”, added Maxwell Scott

“Within the legal constraints, can [insurers] make the system work better or demonstrate that it’s working fine?”

Avoiding costly regulatory changes may be incumbent on the sector demonstrating that it can govern itself effectively.