This three-part blog looks at the outlook for 2019, with a focus on the key challenges and some opportunities that may arise. We start with discussions around Brexit and the Civil Liability Act.
The world today can be described as volatile and uncertain at the best of times. Given the recent dealings around Brexit, it’s no surprise that we’ve grown resilient to these conditions. Whether we leave the EU on 29 March 2019, with deal and transition period or without, what’s crucial is that we continue to meet regulatory and legal standards. Treating customers fairly in our insurance provisions remains a matter of underlying importance.
The force of the Civil Liability Act itself won’t be impacted by Brexit; but amidst the turmoil of a potential no deal outcome, I was surprised to read that 12.2% of UK case law could be at risk of uncertainty1. This may impact the willingness of defendants to settle cases, which puts added pressure on claimants when bringing a case to court.
With natural catastrophes, economic and political factors further restricting our confidence in what we thought would be better times ahead; we’ll need to count on the resilience and expertise that’s carried us through our past challenges.
Civil Liability Act
We thought the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) was the time of big change in the legal expenses market. However the Civil Liability Act, due to take effect in April 2020, has also received a huge amount of attention. The small claims limit for personal injury (PI) claims is currently £1,000, which accounts for around 5% of PI claimants2. After April 2020, this is expected to rise to 30% of claimants with the new limit at £5,0003.
With a higher portion of PI claimants going through the system without legal representation, this should bring opportunity for the Before the Event (BTE) market. Since BTE insurance will offer some protection for PI claimants when proceeding with a small claim, it could take After the Event (ATE) insurance’s place as a more appealing product. But for that to work, these products must be relevant, robust and responsive.
2 IRN research, Personal Injury Market Trends Report 2018
3 IRN research, Personal Injury Market Trends Report 2018