But why insurers still cannot afford to ignore it

ears

With industrial deafness claims there is good news and bad news.

The good news is that, despite AXA UK & Ireland chief executive Paul Evans’s proclamation that deafness claims are “the new whiplash”, in some important respects they are not, writes GR’s sister title Insurance Times.

The bad news is that the recent rise in claims is partly the industry’s fault, and insurers still have work to do to ensure they are not hit again when the next wave of claims comes.

Persistent problem

There is no doubt that insurers are suffering from rising deafness claims. Evans made his whiplash comment after AXA UK revealed in its 2012 results that it had pumped £39m into its reserves to cope with the deafness claims surge. It added a further £25m to reserves in 2013 for the same reason.

AXA was not alone. Deafness claims were also highlighted as a problem in RSA and QBE’s 2013 results.

It is easy to see why executives would draw a parallel between whiplash and industrial deafness.

As with whiplash, deafness claims have increased as economic conditions have remained tough.

Potential victims are encouraged to claim by claims management companies through their now-familiar tactics of TV, radio and social media ads in addition to texts and phone calls.

Also, on the surface at least, deafness appears difficult to prove and courts have to rely heavily on the testimony of claimants rather than hard medical evidence.

An important difference

But according to QBE SIU claims manager Rob Smith-Wright and QBE senior risk manager Mike Barraclough, objective evidence of harm is the crucial difference between whiplash and industrial deafness claims.

Hearing impairments can be measured with audiometric tests, and this information can be cross-referenced with noise reports at the claimant’s place of work.

Barraclough says: “Whiplash isn’t subject to subjective testing. Noise claims are. So we know when somebody has had hearing damage.”

What is more, this evidence is working in insurers’ favour. The industry is on average repudiating between 60% and 70% of deafness claims.

Fixing the damage

Despite this, the industry continues to suffer bouts of deafness claims every 10 to 12 years.

Part of the reason for successful claims, Barraclough says, is that the industry has not done enough to help the businesses it insures to manage risk.

Many companies have chosen to protect their employees from excessive noise by issuing them with wearable hearing protection – the cheapest, simplest solution. The problem with this is that it effectively cedes management of the risk to the employee, as it is tough for companies to monitor whether employees are wearing their hearing protection properly.

Barraclough says: “That has been one of the big problems. We, as the insurance industry, have to hold our hands up and say that we’ve probably not done enough to educate our clients around this. We have not been forceful enough on it.”

Also, as evidence is such a key component of repudiating spurious claims, it is important to ensure that it continues to be collected properly and consistently so  it can be used to construct a robust defence.

Changes to factory layouts, such as moving machinery around, can have a big impact on a factory’s noise profile, so it is important that noise reports reflect any changes.

Barraclough says: “If changes have taken place we need to encourage employers to revisit the noise survey so that we have a proper map of where the noise is occurring and what type of noise it is, which we can then cross-reference with where people used to work.

“Unless we get down to this level of detail, we will keep coming back to this perennial problem of trying to find evidence.”

Taking action

Deafness claims may not be the same as whiplash, but they are showing no signs of going away and will stick around unless insurers work with their clients to ensure robust risk management and noise monitoring is in place.

Barracough says: “Unless we tackle it properly now we are going to be here again in the not too distant future. The noise trends have been going on for a while. There is no sign yet of that tailing off.”