Hooton, Cheshire United Kingdom (PressExposure) February 16, 2012 -- Claimsworth, one of the UK's leading personal injury solicitors, comments on Admiral Insurance's potential move into the legal sector.
Admiral Insurance is considering branching into the legal sector, possibly to replace the loss of lucrative referral fees that generated millions of pounds in profits each year for the company. These referral fees amounted to pre-tax profits of £160.6m during the first half of 2011 for Admiral.
Approximately 5.6pc of the motor insurance company's overall profits came from referral fees, but the insurer no longer generates this profit after they were affected by October 2011's referral fee ban by the Ministry of Justice, as part of the Legal Services Act. This ban was put in place in order to reduce the rise in personal injury claims, which have been blamed for a 40pc increase in the cost of car insurance over the past year.
The Cardiff-based group is exploring plans either to set up its own personal injury law firm where it could potentially direct customers with claims, or become a majority backer in one. However, the company has been warned that it must move quickly to replace the loss of income from the fees paid by lawyers to insurers for information of potential personal injury claimants.
Personal injury solicitors Claimsworth believe that the Legal Services Act will impact the premiums customers pay for car insurance from Admiral negatively.
A spokesperson for Claimsworth commented: "In the case of Admiral Insurance, if high revenues are lost through the banning of referral fees, it is hard to see why such a drop in profit would result in reduced insurance premiums for customers, as Admiral will have no choice but to raise their premiums to make ends meet - especially as their shares continue to plummet. If anything, these premiums will rise until Admiral's reported participation in the legal services market starts to take flight."
For more information on Claimsworth and the personal injury services they provide, call them on 0800 779 70 70 or visit their website at http://www.claimsworth.com.
Claimsworth are a leading personal injury solicitor that can represent their clients on a no-win no-fee basis. Whether a client has suffered an accident at work, road traffic accident or a slip, trip or fall, Claimsworth can offer 100% of their compensation and will not charge a fee if a claim is unsuccessful.
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