Investigations had demonstrated that the claimant was supplied with protective equipment throughout his employment, contrary to his claims.  The case was dismissed, but it required an appeal hearing to secure the ‘fundamentally dishonest’ ruling and removal of qualified one-way cost shifting for the claimant.  The significance of this ruling can be appreciated when looking at the scale and costs of NIHL claims to the industry. There was an increase of 189% in NIHL claims notified between 2011 and 2014 and in 2014 alone, those claims were estimated to cost the industry £360M.  

It is widely accepted that the increased volume of NIHL claims is a result of the shift in focus of claims management companies and professionals who are looking to replace revenue lost from pursuing RTA whiplash claims following regulatory change.   

Insurers are committed to ensuring that genuine NIHL claimants are compensated swiftly, fairly and at proportionate cost.  Unfortunately, the general publicity around ‘No Win No Fee’ has fuelled an environment within which the ‘have a go’ compensation culture is flourishing. The volume of spurious and frivolous claims notified is signalled by the 70% of NIHL claims that are unsuccessful.  But regardless of this fact, insurers must have the resource in place and cover the operational costs to handle the high volume of claims flooding in. 

Of those claims that do succeed, insurers are then often subject to excessive costs which are totally disproportionate to the level of damages paid to the claimant.  Many NIHL claims date back 20 to 30 years meaning insurers have access to very limited records with which to refute claims.  BIBA reports brokers now seeing claims made against clients for NIHL which date back to the early 1960s, prior to the compulsory requirement for EL insurance.

The ABI and the industry are seeking regulatory change to improve this challenging situation. Suggested changes include; extending the fixed costs regime outside the Claims Portal to disease claims; amending the Pre-Action Protocol to enable multi-defendant disease claims to be settled through the Claims Portal; consider extending MedCo to cover claims for NIHL.  The ABI believes a streamlined process with fixed costs will serve to reduce the drivers behind the compensation culture which has penetrated NIHL claims.   

In the interim, insurers can use intelligence from integrated data sources to perform immediate checks at first notification of claim to assist with identifying spurious and frivolous NIHL claims early, reduce costs and fast-track genuine claimants.  CRIF can help insurers to integrate their internal data with multiple external data sources to enable claims handlers to gain an holistic view of the claimant, their claims history and undertake ID verification immediately.        

CRIF’s top tips for insurers interrogating data related to NIHL claims are:

  • Consider link network analysis:  although NIHL claims are associated with an opportunistic fraud phenomenon, link network analysis is useful to consider all parties involved in the claims process including any suspicious connections or networks.​
  • ​Deploy anomaly detection: given the high volume of NIHL claims, anomaly detection may be useful to analyse this big data to identify unusual cases, or suspicious behaviour hidden within the data that may seem to be homogeneous.
  • Harness predictive analysis: use internally recorded data on both historic fraudulent and genuine NIHL claims to build models that provide the highest accuracy of fraud prediction via analysis and sophisticated algorithms.

CRIF is committed to supporting insurers with the detection, prevention and disruption of fraud and remains alert and alive to the fraud risks facing the market.