The number of people claiming to have suffered personal injury in car crashes has risen sharply despite a fall in the number of crashes.
The Institute and Faculty of Actuaries reports that there were 11% percent fewer crashes in 2011 compared with 2010, largely because people are less able to afford to drive as much. However, the number of personal injury claims is up by 18% (the biggest ever annual rise), while the average payout for a crash has risen nine percent.
According to the Institute, there may be validity in the idea that "ambulance chasers" are to blame. It notes there are more claims in areas where claims management companies are based, particularly in the North West.
It also said that the proportion of crashes that result in a personal injury claim is now higher in these "hot spots" than the worst locations in the United States.
All told, the industry is likely to face an extra £400 million in claims each year. If passed on to customers, this cost would mean an average of just over £10 extra in premiums each year per driver.