The Lloyd’s Market Association has launched an International Bodily Injury Index, a unique resource that tracks personal injury awards in more than 80 jurisdictions worldwide (excluding the US).

Developed with law firm DAC Beachcroft and its network of associate firms, the LMA's tool provides an index of average damages/compensation that would be expected to be awarded by a court to a hypothetical claimant. It provides data for the following scenarios:

Minor/superficial injuries
Broken limb (arm or leg)
Amputation below the knee
Total loss of sight in both eyes
Psychiatric injury
Moderate brain/head injury
Paralysis
Death

Within the UK average, payouts for broken limbs (£25k), amputation (£1.07m), loss of sight (£1.75m), psychiatric injury (£1.2m) and head injury (£2.5m) are highest in Northern Ireland. For minor injuries, Scotland (£6k) is the highest as well as having the average largest claims awarded for paralysis (£13.6m) and death (£1.15m). The high personal injury payouts in Northern Ireland and Scotland are due to the recently set Personal Injury Discount Rate of +0.5%, which increases lump sum compensation payments, resulting in some of the highest awards in the world.

By contrast, in the Eurozone, Italy has the highest for minor injuries (€9.3k), Austria for broken limbs (€28.9), Italy for amputation (€801k), France for loss of sight (€1.6m), Italy for psychiatric injury (€709k), Ireland for head injury (€1.62m), Ireland for paralysis (€10.3m) and Italy for death (€1.35m). Serbia (which reported in euros) and Slovakia had the lowest potential payouts across the board.

Commenting on the index, Chris Mather, Senior Executive, Technical Underwriting at the LMA, said: “Some of these data points are remarkable in terms of their variation even within a single country. We believe this index will be a valuable resource for our members to track severities, compensation claims and jurisdictional variances, international comparisons and benchmarking and as the index develops over the years, it will provide insight into the extent to which the level of awards is increasing at or above inflation rates.”

Alastair Herbert, head of international liability at Probitas 1492 and leader of the LMA’s International Bodily Injury Index working group, added: “This index has been something I have been wanting to construct for many years. It has only now become possible by a collaborative market effort spearheaded by the LMA. Underwriting is the blend of art and science and this index will provide a greater degree of certainty to greatly assist our day-to-day decision making. It demonstrates the enormous differences between the jurisdictions which allows us to underwrite the most volatile perils we insure more accurately; as a result, our pricing becomes more aligned with the exposure in that country making us more competitive. By making this a multi-year project, it also talks to our exposure to social inflation which, quite rightly, is one of the key hot topics in the liability world.”

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