Insurer hikes rates as injury claims rise

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The Independent Online

Independent Insurance, which provides cover for companies and wealthy individuals, has hiked its rates by more than 30 per cent and warned that it would increase them further due to the recent explosion of personal injury claims.

Independent Insurance, which provides cover for companies and wealthy individuals, has hiked its rates by more than 30 per cent and warned that it would increase them further due to the recent explosion of personal injury claims.

Independent warned of the increases as it reported a 64 per cent fall in pre-tax profit to £22.2m for the year 2000, mainly caused by the upturn in personal injury claims. Independent, which alerted the market last month about the downturn, saw its shares fall 46p to 230p.

Michael Bright, chief executive, said that premiums in the employers' liability business, through which personal injury claims flow, had risen by 30 per cent and could increase by a further 10 percentage points later this year. This followed a doubling in the average size of claims last year.

Independent and a number of its peers have been hit by a change in the law last year, which enabled companies to take on individuals who have had accidents and fight their claim. The cost of compensation and legal fees generated by the claims can now be recovered from insurers who underwrite the risk of third party defendants such as employers.

Independent also suffered from a £16m loss in its French business and £17m in costs from the UK storms.

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