Personal Injury claims cost the insurance industry Ã‚Â£3.5 billion last year, adding approximately Ã‚Â£100 to the premium of a typical policy. In other words premiums are in some cases approaching twice the rate they would otherwise be.
A significant cause giving rise to this racket, although not all claims are fraudulent, obviously, is the pernicious rash of ambulance-chasing lawyers. Who would have thought that some solicitors, not all lawyers are such, would conspire with others to defraud insurance companies? Anyway, the government is planning to ban the practice of lawyers paying up to Ã‚Â£1000 to your insurers for referring injury claims to them. This is expected in April 2013.
In the meantime a company called Quindell Portfolio (nowt to do wÃ¢â‚¬â„¢me) is a company that processes claims for insurers and are on to something. They say they drive down insurerÃ¢â‚¬â„¢s costs, are more effective and deliver a better service than the insurers can manage in-house. They started from nothing in 2000, floated, and in three years drove sales to Ã‚Â£100 million. The chap at the top has been in the industry many years and is running a development where they are buying a string of related but separate businesses with a view to sewing up the market. They now have a string of complementary businesses in car accident repair, car hire, mobile doctors doing independent medicals following notification of injury (thatÃ¢â‚¬â„¢s rapid), and a law firm.
They are now in talks with major insurers and about to sign contracts with several.
This must result in considerable savings to the insurers; letÃ¢â‚¬â„¢s see if it is passed on.
So what, you ask? Well, it is some time since my certification of qualification and competence as an investment advisor lapsed (on my retirement I hasten to add) but it seems to me these people are about to produce a sizeable growth machine. It should provide a suitable vehicle for substantial profits in the short/medium term.
Now, where did I stash all those non-productive Premium Bonds all those years ago?