Fraudulent whiplash claims could be costing the industry up to £125m a year. Sam Barrett reports on research into accurate diagnosis and other initiatives that could help insurers fight against spurious claims
Measuring someone else's pain is a problem that has dogged philosophers for centuries. Unfortunately, it is also a problem for the insurance industry, where exaggerated and fraudulent whiplash claims are estimated to cost millions of pounds every year.
"Everyone agrees that there is an element of fraud in whiplash claims but it's very difficult to say how big the problem is," says Bob Rabbitts, technical claims manager at Allianz Cornhill. For example, an assessment of the insurer's own claims revealed that 10% of its 10,000 annual whiplash claims were potentially fraudulent, equating to roughly £5m of the £50m it pays out each year. Extrapolating this across the industry, where £1.25bn is paid out annually, and the cost to insurers could be a massive £125m.
To help fight fraud in this specific area, Ecclesiastical Insurance has called on the industry to fund a research project being conducted by the Motion Analysis Research and Rehabilitation Centre at Worcester University. This project aims to map the muscles used in normal movement, providing a standard against which potentially fraudulent claims could be measured, and allowing for speedy and accurate diagnosis.
Brian King, PR manager for Ecclesiastical Insurance, explains why it is calling for this support: "The value of this motion analysis is that it has the potential to introduce proper scientific measurement into an area ruled by opinions and arguments. As well as being used to detect fraudulent claims, it will have broader uses too. For instance, it could be used in the workplace to pinpoint which muscles are under strain, and help lead to healthier working conditions and less claims overall."
In terms of financial commitment, John Hall, business development director at MARRC, says it would cost around £500,000 to research and develop technology that insurers could use for whiplash and associated claims. "There would be a cost involved with each test but we believe that its use would act as a major deterrent. Around 95% of spurious injuries wouldn't turn up, which would result in significant savings."
Potential support is, however, mixed. Bob Still, claims director at MMA, explains: "It's a very difficult area to deal with. In the past we've implemented some strategies to reduce the incidence of fraud, where the cost of doing this has meant we haven't saved any money at all."
The other problem for insurers is that whatever mechanism is used to distinguish genuine whiplash from suspect claims must be as unobtrusive as possible.
John Kenny, chief claims manager designate at NFU Mutual, says that it must not slow down the payment of genuine claims as any delay can ramp up costs too. He adds that although this type of muscle mapping technology could have a useful role to play in detecting fraudulent claims, it is essential the courts accept it as evidence.
"The courts weren't happy with the Blankenship tests that were used to determine level of disability and we would need to be sure this test was accepted," he says.
However, Mr Hall insists that this will not be an issue due to the fact that this type of technology has already been proved in the courts. "It's quantifiable objective data," he says. "Either someone has had a muscle spasm or they haven't."
Other insurers are focusing more heavily on alternative strategies to identify potentially fraudulent whiplash claims. For example, at the end of January, Allianz Cornhill will launch a new initiative to identify such claims.
Mr Rabbitts explains: "This looks at areas surrounding the claim itself, such as the extent of the damage to the vehicles, whether the claimant has taken medical advice, or rejected our offer of physiotherapy. Points are allocated to each indicator, and if the total exceeds a set level we'll investigate further, interviewing our driver and involving engineers and medical experts. This allows us to identify the genuine claims instantly, and ensure they are dealt with quickly."
A court of appeal hearing last December, Kearsley v Klarfeld, may also help to reduce fraudulent claims in this area of personal injury. The case involved a claim for a soft tissue injury sustained in a low-velocity collision.
Ian Turnnidge, litigation executive on the road traffic accident team at law firm Davies Lavery, explains the significance of the judgement: "This places the obligation on the claimant solicitor to produce medical notes at an early stage in the claim. In the past, insurers were asking for them but not always receiving them. This could have a significant impact on the number of cases that reach court."
MUSCLE MAPPING TECHNOLOGY
The Motion Analysis Research and Rehabilitation Centre's muscle mapping technology uses electromyography to analyse muscle and joint injuries. "When someone takes a normal step, 17 different muscle groups fire in a set order," explains John Hall, business development director at the MARRC.
"Our technology allows us to turn this into a muscle map." If someone has a physical problem, he adds, the technology will show this by producing a different muscle map when they take a step: "This can then be used to pinpoint which muscle is causing the problem and the extent of the damage."
MARRC has already developed muscle maps for the lower body, which are used in professional sport, but would now like to extend its research project to the neck and surrounding area. "The research would also take into account other factors that can cause pain, such as psychological problems, and, once we have developed the tool, it would be a question of simply putting electrodes on the person's skin and asking them to move their head to determine whether there was a physical problem or not," adds Mr Hall.
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