ISO announces new database for Local Authorities

• Targets the 85 per cent of Local Authorities that identify dramatic increase in the cost and volume of personal injury claims

• ISO’s claims assessment technology will provide rapid Return on Investment and help ensure fair payments for claimants

• Initiative follows major research showing escalating frequency of claims

Insurance Services Office (ISO) Limited, the UK’s leading provider of personal injury claims and anti-fraud insurance services and solutions, has launched a new initiative for Local Authorities and Councils. ISO’s Personal Injury Claims Database solution will help the 85 per cent of Local Authorities that are experiencing a significant rise in the annual cost of personal injury claims.

The software ensures that Local Authorities and Councils, who may already have developed the necessary risk management strategies in-house to deal with the increased frequency of claims, are equipped to tackle issues of how much to pay for the claims they accept. By ensuring consistency, overpayments can be minimised, while ensuring fast and fair settlements for meritorious claims.

Research shows escalating frequency of claims
A recent study by RBA Research, on behalf of Zurich Municipal and the Local Government Association (LGA), which polled 212 councils in England and Wales, found that 85 per cent believed that Conditional Fee Agreements (CFAs) had drastically increased their annual cost and volume of personal injury claims.

Datamonitor, an independent market analyst, estimates that more than 16 per cent (16.3%) of the 10.4 million accidents that occur each year potentially result in a personal injury claim that is initiated because the injury was wholly or partly attributed to a third party. Such findings, combined with the current trend of high-profile advertisements promising claimants 'no-win, no-fee' settlements, suggest that there has indeed been a steep rise in claims frequency.

This prompted the LGA to urge Local Authorities to adopt sound risk management strategies around early notification of accidents, follow best practice initiatives and maintain updated inspection systems and database records. These improvements appear to have reduced the frequency of claims with some councils experiencing a dramatic drop in the number of claims being paid.

According to RBA Research, 42 per cent of Local Authorities are now in the process of developing detailed risk management strategies as there is a sharp rise in the number of claims they receive each year. These strategies have proved to be highly effective in allowing councils to reject some spurious claims and reduce the overall claims frequency.  

Meritorious claims of course have to be paid and Local Authorities can improve their risk management performance by analysing and controlling the costs of those individual claims.

Most Local Authorities currently outsource their claims handling functions, which has allowed authorities to leverage the expertise of those claims handlers and achieve economies of scale. For many councils outsourcing claims handling is far more cost effective than having in-house claims handlers. However, it is still the Local Authority’s money that is being paid out by outsourcers, so benchmarks and checks are still needed to ensure payouts are consistently fair and not excessive.

ISO’s Personal Injury Database will provide Local Authorities with a historic database of personal injury claims information that is transparent to both Local Authorities and their outsourced claims handling organisations involving personal injury payouts. The following benefits can be realised from the ISO database:

Analytics
By capturing information that has not previously been available, Local Authorities will be able to carry out objective analysis of their claims settlements, regardless of whether or not they are outsourced.

Consistency
By using the information in the database as a guide, Local Authorities will be able to ensure that claims settled by them or their claims handling agents are consistent, eliminating both overpaid and underpaid cases that cause delays in settlement and sometimes incur unnecessary legal costs.

Fair compensation
Historical settlement information allows comparison between payments to claimants for similar types of injuries. This ensures fair compensation is always paid to genuine claimants.

Benchmarking
Capturing claims information in the Personal Injury Database will allow Local Authorities to benchmark themselves or their claims handling agents against their prior performance, the performance of other agents and the industry as a whole.

Web Access
As the database is a web-based system, Local Authorities and their claims handling agents will have access to their own data simultaneously. This will allow a Local Authority to measure its personal injury claims handling arrangements on a daily basis. The database will allow it to exercise a measure of control and influence not previously available. By analysing the data, the ISO database will also help target claims for further audits, enabling Local Authorities to use their auditing resources more cost effectively.

In-house and Outsourced Access
The database is hosted by ISO and is available to Local Authorities, whether or not they handle their claims in-house or outsource them. In the latter case, the authority is still able to see information about its personal injury claims on-line, while being settled by the claims handling agent.

CRU Notification
The personal injury database provides automatic notification of claims to the Compensation Recovery Unit together with an electronic response. When the requirements for Local Authority compensators are extended to other non-motor claims in 2006, it can be done automatically by either the Local Authority or their claims handling agents.

“By implementing an effective risk management strategy, Local Authorities are seeing significant reductions in the frequency of claims. They are now looking for better ways to manage and assess personal injury claims payouts,” commented Joe Pendle, Director of Client Services, ISO. “Combining such strategies with next-generation tools and techniques will enable Local Authorities to handle more claims with consistency and ensure due diligence.

“All too often, councils and Local Authorities don’t have the necessary control over this function within the organisation as it is outsourced to a third party. ISO’s web-based Personal Injury Claims Database ensures that claims assessment software can be implemented quickly and easily. Most organisations use it as a standalone system. Since it is a .Net solution, it can be easily integrated with other systems if required,” Joe Pendle added.

To tackle this growing challenge, Local Authorities can also take advantage of independent consulting services, such as ISO’s Measures of Excellence team. The ISO service provides a full audit of their closed claims files and workflow processes. Such measures also enable Local Authorities to create benchmarks for both internal and industry best practices for consistent, high-quality personal injury claims handling.

About ISO’s Personal Injury Database
The ISO Personal Injury Database is the industry's first personal injury claims assessment solution that manages the multiple dimensions of organisations' personal injury claims portfolios. The database understands the severity and recovery implications of over 18,000 injuries, treatments, complications and pre-existing conditions and 14,000 occupations and creates a historic database of all the injury claims of a compensator. The Personal Injury Database helps claims handlers, loss adjusters, managers and actuaries manage the unique and complex medical, legal and occupational issues presented by personal injury claims and helps ensure appropriate financial arrangements are agreed to and implemented. Claims handlers can manage all aspects of a case from first notice of loss to return-to-work plans, rehabilitation and assessment of damages.

About ISO
Insurance Services Office (ISO) is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, estate agency, health services, local and central government and human resources. Clients use ISO's databases and services to classify and evaluate a variety of risks and detect potential fraud. Around the world, ISO's services help customers protect people, property and financial assets. ISO's customers in the UK include Admiral Group, CIS, AXA Insurance, Chaucer Insurance, Highway Insurance, Lloyd's, Zenith Insurance, Link Insurance, Tradex and Zurich Financial Services. Please visit www.iso.com

For more information please contact:
Mark Strang, ISO
Tel: 01252 761055
mstrang@iso.com

Joe Pendle, ISO
Tel: 01252 761068
jpendle@iso.com

Manuela Whittaker, IBA – PR for ISO
Tel: 01780 721433
mwhittaker@iba-europe.com


Alternatively please visit ISO on Stand 3 at the ALARM Conference at the University of Manchester (Sackville Street Campus) on 26th and 27th June 2006.


ISO 150-06

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