July 2021 Blog for Insurance Claims

So here we are, July 2021, and in many ways a very different place to that of July 2020 when we were still in the ‘eye of the storm’ so to speak. But with complete normality still some time away, what effects are the recent personal injury reforms and the ongoing Covid-19 backdrop having on the online search market and what is currently influencing it?

We are currently seeing significant price inflationary pressures which means the average cost of claims generation is up by between 16% and 50% depending on the claim type.

COVID-19 is still having an impact on performance with consumer demand fluctuating around the easing of restrictions and also the number of people in isolation or ill because of the virus. What’s more, we are seeing strong competitive influences driven by the Civil Liability Act (CLA) reforms.

Competition on specific employer liability (EL) advertising terms is at their highest ever and we are seeing the cost per click on these campaigns running at 95% more expensive in July 2021 compared to 12 months ago. However, I am encouraged that despite these pressures the overall mix of EL claims we are able to deliver is increasing.

Work accident volumes remain 35% down on what we were seeing last year, hardly surprising given vast amounts of the workforce have spent the last year working from home. The strength we saw in the market last year was in January and February, but we also saw a rise in searches from people making historical attempts at claims during the start of the pandemic when they were losing their jobs and looking for money to support themselves. Volume in June this year was down 15% on May but May was 18% up on April so it is very much a topsy turvy market.

We are certainly seeing some wild and erratic behaviour across the market at the moment, with advertisers spending well above market average one week and then vanishing the next. However, we are still seeing the strongest volume of advertising and advertisers in the work accident sector and the fall in search volume saw the cost of advertising here increase by 65% in June compared to May.
We are also now more than a month down the line from the launch of the controversial portal for road traffic accident (RTA) claims.

RTA search volume was down 19% in June compared to May but is up 11% compared to June last year and overall RTA search is up 13% compared to the same period last year. Whilst these search volumes remain below average it is still too early to draw any conclusions as to whether this is directly related to the introduction of the portal or not. I would suggest they are more reflective of peaks and troughs in social activity relating to various stages of lockdown restrictions relaxing.

Interestingly, we are still seeing firms advertising for RTA claims. In June there were a dozen advertisers and, so far in July, we have seen a slight increase in that number to 14. However, it’s important to note that the amount they are spending is down and we estimate that it is costing about 45% less to generate RTA enquiries through RTA specific campaigns now compared to before the launch of the portal. This is hardly surprising as this is going to be an area that will see a significant decline over the coming months. While some firms have indicated that they will continue to take on RTA claims, we believe this activity in the market relates to firms mopping up enquiries for accidents that happened before 31 May and therefore still qualify against the old regime. We expect to see a considerable drop off in the coming months for firms who will take on claims that have happened since 31 May.

If lockdown measures remain eased and we start to see a significant return to the workplace over the coming weeks we expect that to be reflected in both RTA searches and accident at work searches. Undoubtedly, more data and time is needed to observe these trends to separate what is COVID-19 or CLA related price inflation. More time is also needed to really understand what impact the reforms are having on the market. Is this price inflation the new normal within a more competitive smaller marketplace, or are we seeing competitors still trying to measure market forces and therefore such increases are temporary and will ease over the coming weeks? We will no doubt have answers to these questions in the coming months.