Andrew Morrish, AVIVA – Expert View on the Civil Liability Bill

He’s a life-long insurance guy with a passion for customers and technology. With an unusual combination of experience in IT, Change and Insurance he leads the development of digital and analytics solutions aiming to make claims service effortless, fast and fair.

He has delivered industry-level technology change and is a regular spokesperson on industry issues and reforms. Andrew is a trustee of two UK-based charities, with a particular interest in education and social care provision in Kwazulu Natal, South Africa. He is married with three children.

Do you think the reforms will have the desired effect on reducing the cost of claims?

Yes – we are already starting to see the number of injury claims fall, and premium data shows that cuts have naturally followed. All this before the bill has even become law! While there are many other factors which play into insurance premiums, this will undoubtedly be positive for consumers.

What are the potential unintended consequences?

One consequence could be that claims management companies (CMCs) try to take a more active role in bringing injury claims. With this in mind, the FCA will need to be robust from April 2019 in their regulatory approach of CMCs, as well as alert and quick to challenge a CMC which changes its focus to offer a different service in an area where they are not qualified to operate.

A few thoughts to address this challenge:

  1. We would encourage the FCA, using its power granted in the Financial Guidance and Claims Act 2018, to impose a mandatory cap on the fees charged by CMC as early as possible. With the fee cap only applying to PPI claims, this could lead to CMCs changing their business model to exploit this loophole.
  2. Claimants should be made fully aware that they can manage a claim themselves and avoid being potentially exploited by a CMC, especially if they hold Legal Expenses Insurance
  3. A fit and proper person’s test should be carried out robustly to stop rogue directors of CMCs leaving a liquidated CMC and then setting up a new firm.

How will this impact the consumer?

There are multiple consumer benefits to the Civil Liability Bill:

  1. This legislation is expected to reduce the cost of motor insurance.
  2. This should reduce the number of ‘crash for cash’ frauds that have put motorists at risk. This will make the roads safer and reduce the impact of fraud on motor insurance premiums – a win/win.
  3.  By increasing the small claims track limit, lawyers will no longer chase low-value claims, which should lead to a reduction in the number of nuisance calls pursuing an injury for an accident the receiver may or may not have had.

What impact will it have on Legal Expenses insurance (LEI) products and how these are distributed?

We believe the LEI product will still have value to customers and will help them bring claims if they wish to be assisted in the process. LEI cover might become more valuable in supporting customers who don’t want to give up a portion of their claim payment to whoever represents them.

From your perspective in their current form, are the reforms a good thing or not?

Yes, they are a victory for consumers. The bill represents a fairer system which balances care and compensation for genuine injuries while removing excess costs. The result will help to make motor insurance more affordable for us all.

There is more to do – the original Part 2 of the legislation needs to be progressed to avoid spurious claims moving from whiplash-type injuries to other areas of motor claims. Referral fees and the whole world of ‘non-fault’ claims still need to be addressed.

Aviva, like most insurers, has pledged to pass on 100% of the benefit from these reforms to our customers

We believe the LEI product will still have value to customers and will help them bring claims if they wish to be assisted in the process.

Andrew Morrish


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