Figures released on 23 May from the Institute and Faculty of Actuaries’ UK Deafness Working Party reveal that the number of deafness claims in the last half of 2015 declined significantly from the high levels experienced in the first half of 2015.
The figures show claims in the first half of 2015 were 8% higher than the same period for 2013, when in excess of 40,000 claims were reported, but this volume was not maintained and the level of claims in the second half of 2015 were 26% lower than in the first half of the year.
The reduction was even more marked in the final three months of 2015 which saw a 35% fall compared to the levels earlier in the year.
Gregory Overton, actuarial services director at PwC, said: “The spike in claims experienced during early 2015 was not widely foreseen by the market and many questioned whether volumes at or around the peak 2013 levels were sustainable. The latest figures would seem to support the view that these claims have reached the point where the pool of eligible claimants is shrinking, meaning claims volumes could continue to decrease.
“At the same time it appears that the proportion of claims resolved by insurers at nil value has also been increasing. For claims reported in 2010 and prior it looks as though around 50% of claims will be for nil values whereas for 2014 and 2015, it’s closer to 60%.
“Given the timeframe to settlement, on average now over two years, it is still going to be a while before we know if these claims are truly tailing off. However, from discussing recent experience with those in the market anecdotally, claim numbers have continued to fall in the first half of 2016.”
John Baker, senior manager within PwC’s liability restructuring team, added: “Whilst these numbers will be welcome news to many insurers and self-insured corporates it is worth noting that many claimant firms have reengineered their processes and notifications strategies recently. In particular a number appear to have scaled back on the volume of claims notified to insurers and are instead focusing on the more meritorious claims.
“It must be remembered that there are significant volumes of claims still to be settled and claimants and defendants have a shared interest in ensuring these claims are clearly and properly presented so they can be resolved in a fair and timely manner.
“If quality over quantity is now the order of the day then we could however see the number of deafness claims settled at no cost decline significantly and whilst insurers could see the proportion of valid claims rise, operational costs should reduce overall.”
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