UK’s high street targeted by claims management companies as they seek to profit from Employers’ and Public Liability claims

Public Liability claims made against SME retailers more than doubled between 2009 and 2014, whilst Employers’ Liability claims nearly doubled over the same period, according to data from AXA.

18 February 2015

Posted in Product

This rise in claims activity supports the growing view that claims management companies (CMCs), whose ability to make profit from motor claims has been significantly reduced by recent legislation, are now targeting retailers across the UK with speculative Employers’ and Public Liability claims to maintain revenue streams.

In 2009, the percentage of retailers’ policies claimed against for Public Liability stood at 1.9per cent, rising to 5.1 per cent in 2014, while claims frequency for Employers’ Liability was 23.6 per cent in 2009, rising to 45 per cent in 2014.

These statistics are supported by AXA’s most recent study on compensation culture which found that the second highest cause of ‘nuisance calls’ made by CMCs was in relation to accidents occurring in public places, a 15 per cent increase in the last year.

Amanda Blanc,  CEO at AXA UK’s Commercial Business

It is clear that the rise in claims against retailers cannot be explained by the sector suddenly becoming more risky. Many retailers are being targeted by opportunistic claims farming companies who view claimants as a potential revenue stream rather than someone who needs help and the increase in the volume of claims would seem to support that view. The recent rapid year-on-year increase of so-called “slip and trip” claims are key factors in higher premiums.

The rise in CMC activity seeking to encourage Employers’ and Public Liability claims coincided with a restriction on their ability to profit from motor claims and it would appear they are now actively targeting the UK’s business community to source more potential clams.

Amanda Blanc, CEO at AXA UK’s Commercial Business

The increase of speculative claims for the retail sector - many prompted by CMCs - is reflected in the quality of claims dropping. In 2010 the AXA’s repudiation rate for Employers’ Liability claims was 19% and now stands at over 30% whilst the repudiation rate for Public Liability claims has risen from 39% in 2010 to 46% today. This increase reflects the speculative nature of the many of the claims being submitted and lack of evidence produced to support the claim.

The environment for retailers of all sizes is still challenging and many – particularly smaller companies – are struggling to keep their heads above water.  The actions of these CMCs, in bringing high volume and often spurious claims against employers, can be highly distracting and time consuming for retailers trying to focus on the all important job of trading and keeping people in employment.

In addition, the cost of insurance is correlated to the volume of claims and  it appears that the actions of a minority of unscrupulous individuals are pushing up the cost of doing business for the honest majority – and this group does not appreciate that exaggerated or fraudulent claims has a broader social impact.

Retailers can protect themselves against speculative Employers Liability claims by keeping comprehensive and clear records of staff training, accident handbooks and who is responsible for what at the workplace.

Amanda Blanc, CEO at AXA UK’s Commercial Business


This data is mined from AXA UK written premiums data for small and medium enterprises in the UK from 2009 to 2013.