PRESS RELEASE
05 December 2024
LMA launches first-of-its-kind International Bodily Injury Index
London, 05 December 2024: The Lloyd’s Market Association (LMA) today announced the launch of the International Bodily Injury Index, a first-of-its-kind resource that tracks personal injury awards worldwide.
The index is a three-year strategic project developed by the LMA's International Liability business panel to track social inflation by analysing personal injury awards (and using the expertise of local lawyers) in more than 80 jurisdictions worldwide (excluding the USA). It covers 26 European countries, 20 countries in Latin America and Caribbean, 10 in Africa and 22 in Asia. In addition, the index provides state-level data for Australia and provincial data for Canada.
In cooperation with law firm DAC Beachcroft and its network of associate firms, the LMA has developed an index of average damages/compensation that would be expected to be awarded by a court to a hypothetical claimant.
The index 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
The full content is reserved for LMA members at this stage. Non-members can also gain access by contacting the LMA for more information. Highlights from the index include:
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 (PIDR) 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.
Even within a single country like Canada or Australia, there are considerable variations across the provinces and states. In Canada, British Columbia and the Maritime provinces tend to have the highest or among the highest awards.
In general, awards in Canada are much lower than in Australia, where the highest award for amputation is A$4.3m in Victoria (£2.2m at current exchange rates), compared to CA$2.35m (£1.3m) for the same claim in the Maritime provinces. The state with the highest awards among the scenarios is the Australian Capital Territory, while minor injury awards in South Australia exceed those of any other state. One reason for the Australian figures being among the highest in the world outside the US, is the increasing number of cases that are heard before a jury.
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.”
- ENDS -
Notes to Editors
Media relations contacts
LMA:
Carole Porter, Head of Communications | +44 020 3307 3947 | Email: carole.porter@lmalloyds.com
Omnia Partners:
Will White, Director | +44 777 1555247 | Email: will.white@weareomniapartners.com
About the Lloyd’s Market Association (LMA)
The Lloyd's Market Association (LMA) exists at the very heart of Lloyd's, a world-leading global marketplace for complex risk where solutions to challenges are delivered every day. All 55 Lloyd's managing agencies, with a total market stamp capacity of approximately £52.6bn in 2024, and all Lloyd's members' agents, are members of the LMA.
We represent our members' interests to organisations including governments, regulators, and the market's central supporting body, the Corporation of Lloyd's. We provide professional and technical expertise in areas ranging from model policy wordings to the implementation of innovative technologies. We connect with our members to identify and resolve issues facing the market, and work in partnership with Lloyd's and the other market associations to influence initiatives and outcomes. We operate the market's most comprehensive technical education service, the LMA Academy. For more information visit: www.lmalloyds.com.