Norwich Union (NU) has begun a £1m study to prove that rehabilitation works.
The pioneering project will focus on whiplash claims, the most common personal injury claim.
A centre has been set up in Maidenhead, in conjunction with rehabilitation specialist Rehabilitation UK, to conduct the study.
The project will initially concentrate on NU's customer or those injured by its policyholders. But the insurer is also looking to involve the victims of uninsured drivers.
Other insurers are also understood to be looking at using the centre's facilities.
The study will assess the impact of rehabilitation on whiplash claims. It will look at the most effective treatments and undertake a cost-benefit analysis to determine the extent to which rehabilitation has a financial impact on claims costs.
The company claimed this was the first time anyone had conducted such a project.
NU director of technical claims Dominic Clayden said: "We have taken a leap of faith in terms of using rehabilitation for high volume low value claims.
"There has been no empirical evidence that physiotherapy would have a cost benefit. We wanted to prove that it does."
The programme will focus on "evidenced-based" treatment whereby only treatment that is shown to have beneficial effects is used.
Morag Heighway, claims manager - technical claims services at NU, said: "It is early days but the emerging data are already helping us to understand the true cost of the assessment and effective treatment for these injuries.
"So far as we are aware, this is the first attempt at considering the direct relationship between the cost of providing an evidence-based and outcome-focused treatment service for soft-tissue 'whiplash' claims and the overall cost of these claims."
So far,130 cases have been assessed, with around 25 completed. In total, 500 claims will be examined, after which the full analysis will be undertaken.
The project is expected to last 18 months.
Whiplash injuries: the sting in the tail for the insurance industry
[Sources: Allianz Cornhill, Norwich Union, ABI]
