# Volume of periodic payment orders remains low, according to Aon UK motor insurance study
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2016-08-22
Category: INSURANCE
Category URL: https://financedigest.com/category/insurance
Meta Title: Aon Benfield Study Reveals Trends in UK Motor Insurance PPO
Meta Description: Discover key findings on PPO settlements, claims data, and impact on reinsurers in latest study by Aon Benfield.
URL: https://financedigest.com/volume-of-periodic-payment-orders-remains-low-according-to-aon-uk-motor-insurance-studyhtml

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Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON), today announces the findings of its latest study of large losses in the UK motor insurance industry, based on claims data representing 75% of the total market.

The analysis, which examined more than 550 Periodic Payment Orders (PPOs) and over 8,000 large claims, reveals that the number of PPOs granted by UK courts in 2015 was similar to that of 2014, but substantially lower than the 2011 peak. The data show that in 2016 monetary terms, an average 15% of an insurer’s motor claims above £1 million will reach a PPO settlement.

The study reveals that the average time taken to settle a PPO [claim was six years](https://www.financedigest.com/u-s-labor-market-powers-ahead-as-weekly-jobless-claims-fall-layoffs-hit-24-year-low.html "U.S. labor market powers ahead as weekly jobless claims fall, layoffs hit 24-year low"), culminating in an average lump sum award of £2.1 million, and an average annual award of £90,000. The mean [life expectancy](https://www.financedigest.com/life-jacket-market-globally-expected-to-drive-growth-through-2027.html "Life Jacket Market Globally Expected to Drive Growth through 2027") of the injured party at the point of the PPO settlement was shown to be 42 years.

In terms of their impact on reinsurers, PPO claims are [expected to take an average seven years to reach a reinsurance programme attaching at £1 million; for a £5 million](https://www.financedigest.com/pallet-boxes-market-is-expected-to-reach-us-184-5-million-in-2022-exhibiting-growth-at-cagr-of-5-7-for-2022-28-fmi.html "Pallet Boxes Market is expected to reach US$ 184.5 million in 2022, exhibiting growth at CAGR of 5.7% for 2022-28: FMI") retention, the recovery time increased to 21 years, according to the study.

The findings also reveal that [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers") are becoming more adept at predicting the quantum of large claims – which can often take years to settle with recent years showing little movement from initial estimate to ultimate.

Luke Proctor, actuary at Aon Benfield said: “In recent years, the [market level](https://www.financedigest.com/electronic-board-level-underfill-and-encapsulation-material-market-to-expand-at-a-cagr-of-5-5-by-during-the-forecast-period-of-2020-2030.html "Electronic Board Level Underfill And Encapsulation Material Market to expand at a CAGR of 5.5% by during the forecast period of 2020-2030") of case reserving for large losses has become faster and more accurate.  This is something we are also seeing on an individual client level.”

Meanwhile, the [study confirms](https://www.financedigest.com/eye-tracking-study-confirms-that-high-impact-formats-outperform-standard-display.html "Eye-tracking study confirms that high impact formats outperform standard display") that large loss inflation for 2015 is expected to be around 5-7%, similar to prior years.

Richard Evans, Head of UK Motor at Aon Benfield, said: “As we head into the January 1 reinsurance renewals process, the timing of this [study is key](https://www.financedigest.com/refurbished-medical-imaging-equipment-market-comprehensive-study-with-key-trends-major-drivers-and-challenges-2018-2026.html "Refurbished Medical Imaging Equipment Market: Comprehensive Study with Key Trends, Major Drivers and Challenges 2018-2026"), and should help inform our clients’ reinsurance purchasing strategies. The level of PPOs seen in the [market in 2015 should help to allay reinsurers’ concerns around this type](https://www.financedigest.com/industrial-catalytic-converters-market-competitive-growth-strategies-based-on-type-applications-end-user-and-region.html "Industrial Catalytic Converters Market Competitive Growth Strategies Based on Type, Applications, End User and Region") of settlement. We saw dramatic rate increases in 2011-2013 due to the introduction of PPOs.


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