Regular blog readers will be aware on my feelings about Claims Management Companies and the forthcoming Personal Injury referral fee ban. But what’s interesting, whilst all the conversation is about the money Claims Management Companies make from the referral fee process and that insurance premiums are higher as a result, little is said about the money the insurance companies themselves make from referral fees. Bearing in mind also that much of the pressure for the ban has come from insurance companies complaining about referral fees, the latest figures from the insurance colossus Admiral, has revealed some very interesting information. Apparently it makes an average of £7 by way of referral fees for personal injury claims for every single vehicle covered by its insurance.
This is not guesswork or scandal mongering – this remarkable statistic comes from Admiral’s own six monthly financial report! Given that Admiral is responsible for the insurance of 3.5 million UK vehicles, my calculation is suggest that it is earning a whopping £24.5 million each and every year, purely from accident claim referral fees.
It was also interesting to hear when asked about how they are going to deal with the loss of this referral fee work, or whether it planned on setting up or buying its own personal injury law firm, Admiral simply refused to comment.
So the next time you hear insurance companies whingeing about the evils of referral fees [which we refuse to pay by the way], don’t forget the huge bundles of cash Admiral are making from leads for personal injury compensation cases.