Rehabilitation gaining ground in injury claims/surge in demand for transactional risk insurance. News in brief

BIG INCREASE IN USE OF REHABILITATION IN PERSONAL INJURY CLAIMS

Thirteen years after its launch, the Rehabilitation Code is now “a fully established part of the claims process”, according to a report by the IUA-ABI Rehabilitation Working Party. 97% of the claims handlers surveyed, 93% of the claimant lawyers and 88% of the insurance lawyers say they use it at least some of the time.

Meanwhile, the use of rehabilitation when handling personal injury insurance claims has continued to rise, the survey found. The vast majority (81%) of those who took part felt it had gone up at least slightly; 51% of insurers said it had increased substantially.

There continues to be a variation between the different types of claim, however, with bigger injuries much more likely to receive treatment than those with a lower value. The quality of case managers and other care providers remains an issue, especially for insurers and their legal representatives, and may be holding back the use of rehabilitation.

“This survey is very encouraging, and demonstrates that the insurance industry continues to lead the way in supporting rehabilitation.  The Rehabilitation Code may have been a radical innovation in its day but is now an established part of the personal injury claims process,” said ABI head of Motor James Dalton.

A similar exercise in 2001 revealed that hardly any practitioners used the Code and many, especially claimant lawyers, were unaware of its existence.

SURGE IN DEMAND FOR TRANSACTIONAL RISK INSURANCE FOR M&A COMMUNITY - MARSH

Demand for transactional risk insurance grew by 41% globally in 2012 as firms increasingly turned to the insurance market to protect large deals and cross-border acquisitions or sales, according to a report by Marsh.

The most pronounced increase in policy limits for transactional risk insurance is in North America, up 86% during 2012. According to Marsh, this upward trend is being driven by an increased usage of transactional risk insurance on deals in excess of $100 million by clients operating in North America.

Lorraine Lloyd-Thomas, a Senior Vice President in the PEMA Practice at Marsh and Head of the UK Transactional Risk team, commented: “Overseas buyers seeking acquisitions in North America are increasingly cautious about entering the market, given the uncertainties surrounding economic recovery and the enhanced emphasis on regulation. Conversely, many North American clients are approaching deals in EMEA and Asia Pacific with similar trepidation. As a result, these corporate buyers are leveraging transactional risk insurance solutions to mitigate risk and provide the comfort required to proceed with their transactions.”

Marsh’s report also notes the growing popularity of warranty and indemnity (W&I) insurance in the global infrastructure sector, ranging from simplistic deals relating to wind farms to complex assets such as those owned by utilities and regulated by government agencies.