Across the UK, local authorities are facing the increasing financial impact of rising insurance claims, with serious implications for the allocation of public funds, warns actuary John Birkenhead of HJC Consulting. He attributes the situation to a combination of the significant rise in claims, especially weather-related, school arson and highways claims, and the decrease in the level of insurance cover offered to local authorities. "Public liability claims have increased dramatically in the last couple of years, typically now costing local authorities over £1.5m a year. Whereas in the past, insurers would have picked up some of the cost, it is likely that in the current insurance climate the local authority will have to face these costs alone".
WIth the need for accurate assessment of the amount required to meet these claims greater than ever, Birkenhead claims that the poor quality of data available can lead to significant over or under-estimation of the sum required. "In the case of over-funding, this can mean thousands, if not millions of pounds of public money."
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