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Whiplash claims decline, Insurance companies take a breather

April 1, 2012 by  Filed under Featured, News


What could be common between Charles Dickens and CEO of Admiral, Henry Engelhard, who are two centuries apart?

‘Tale of two cities,’ Dickens’ famous book begins with “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness”. This perfectly fits with Admiral’s performance in the year 2011. The analysis is based on what was feared as a bad year for the insurance company, turned out to be quite good. It was a good year because less of losses than feared. It was also a bad year because much more was expected.  Initially, analysts had forecast profits to rise by 22%. Since Admiral had been affected by raising personal Injury claims, it had cautioned the city analysts to review their estimates. There was a 13% increase in profit before Tax amounting to £299 million in 2011.

The insurance company ‘Admiral’ insures more than 10% of cars in Britain and the result for year 2011 was better than analysts’ forecast of £289 million. In the latter part of 2011, injury claims  saw some decline what with the epidemic of ‘whiplash  claims’ diminishing to some extent. Shares of Admiral closed at £ 11.44. David Stevens, chief operating officer of Admiral, observed that a fall of 10% in road traffic accident whiplash claims was recorded. The reasons for such a fall was attributed to higher policy excesses, mild winter weather, rising petrol prices, lower disposable incomes. All these factors contributed to the slowing down of personal injury claims.

Admiral’s staff numbering 5,500 will receive free shares worth £3000 each and the share holders getting 11% more on dividends. Admiral has every reason to cheer going by Engelhard’s revelations that for the eighth consecutive year the company reported a 59% return on capital with record turn over and record profits.

Insurance premium for the car segment has ever been increasing in order to meet the growing costs. As always, insurers blame whiplash claims for their troubles instigated by the no win, no fee solicitors. The uproar over whiplash epidemic resulted in the heads of top insurance companies and that of Admiral, meeting David Cameron for discussing on the whiplash scourge. It is interesting to note that even though the number of accidents has seen a decline of 16%, – less than 210,000, whiplash claims have spurted to 32%–to 570,000.

Marcus Barnard, an analyst with Oriel Securities opined that it was sensible to tackle bodily injury claims while slowing the claims growth rate. Not to be left behind, Jeremy Wilson, chairman of Bloomsbury Publishing, goes a step further quoting Charles Darwin. He somewhat repudiates Darwin’s ‘survival of the fittest’ theory; he said Bloomsbury Publishing was able to survive not because it was the strongest or was the most intelligent. It was able to survive because it was most adaptable to changes spanning a period of 25 years.

There is Andrew Perloff, of Panther Securities, a UK property investment firm, and his ramblings thus.  “As always, my ramblings are little convoluted and it may be hard for readers to understand the connection between my thoughts on BP PLC, the bankers, George Best and our Afghan tenant, of course I will explain. In every case the wrong person/people have been attacked.”

Tim Wheeler, Brixton Estates chief, posted a loss of £237 m in 2008. It was the beginning of the financial crises or the second great depression, initiated by the US mortgage losses.

How true is Warren Buffett’s statement that   “Good times don’t last forever”!

Related posts:

  1. Personal Injury Claims And Whiplash Compensation Culture Insurance bosses back Cameron
  2. Whiplash injury claims bill cost a huge £2 billion, but the motor insurance is set to drop because firms are working together to do this
  3. Personal injury claims cost a huge £2.4 million a day, this has risen the cost in insurance policies by about £30 per year
  4. The government are to get a group of specialists to look in to no win no fee claims for car accidents, call in Dr Whiplash
  5. About 700 firms out of 5,000 have been struck off for chasing car insurance claims