High premium rates and uncertain underwriting conditions will continue to create difficulties for UK businesses unless major market changes are implemented, according to EL practice head Andrew Welch.
"The responsibility for EL reform now lies firmly in the hands of employers, health agencies, the legal profession and the insurance industry. Together, we need to reduce the incidence of industrial illness and disease, drive down claims costs and increase the effectiveness of rehabilitation.
"Unless claims inflation is stemmed, EL premiums will continue to rise and competition will not return to the market. With an average 40% of the value of EL claims currently being eaten up in legal and other costs, the practice will focus on reducing claims costs by changing social behaviours, for example through more effective rehabilitation and alternative dispute resolution."
A key element of the practice's work will be to demonstrate that the total cost of risk is wider than EL premium plus insurance deductible losses, and includes, for example, lost workdays. The practice will then seek to produce quantitative analysis showing which risk management solutions have the largest impact on EL claims, allowing for more effective solutions and ultimately better premiums and results.
