HC Deb 27 October 2003 vol 412 c10WS
Mr. Bellingham

To ask the Secretary of State for Trade and Industry what research her Department has conducted into the proportion of the cost of employers' liability compulsory insurance that is taken up by(a) paying the claimant, (b) covering legal costs and (c) covering administration costs; and what steps she is taking to reduce the proportion taken up in (i) legal and (ii) administrative costs. [133413]

Malcolm Wicks

I have been asked to reply.

In the first stage of the review of Employers' Liability Compulsory Insurance the Government, in assessing the scope and nature of the current EL difficulties, examined EL insurance results.

Figures from Datamonitor's analysis of data from the Association of British Insurers (ABI) showed that, during 2001, claims incurred were 111 per cent. of net written premiums (gross written premiums less outward re-insurance premiums). Management expenses and commission accounted for a further 28 per cent. of net written premiums.

The Department does not have figures within the above analysis telling us precisely the proportion of claims incurred that was made up of legal costs. However evidence from one major EL insurer submitted during the first stage of the review suggested that legal costs represented on average 36 per cent. of the total claims cost for EL.

The Department is working closely with stakeholders to reduce the costs of resolving claims and will report further on this in the autumn.