A new insurance industry report reveals that the number of personal injury claims made to motor insurers continues to rise, in spite of fewer injuries and deaths on the roads.

The report, commissioned by the Association of British Insurers and the International Underwriting Association, reveals that the number of bodily injury claims made to UK motor insurers rose by 3 per cent a year between 1996 and 2006. During the same period, the total cost of bodily injury claims rose by 9.5 per cent a year.

The increase in the cost of claims is most dramatic amongst the larger claims. Whilst the cost of claims below £80,000 has increased by 6 per cent each year, the increase for claims over £80,000 was 10 per cent each year. In the past five years there has been a dramatic leap of 30 per cent per annum in the costs per insurance policy for claims of more than £5m.

Insurers have also seen an increase in the very largest claims. Currently there are three claims outstanding for more than £15m and one uninsured driving claim estimated at £20m.

A number of factors are thought to have contributed to the increased cost of claims. These include increased life expectancy when calculating compensation and the requirement for insurance companies to reimburse the NHS for the cost of treatment.

The report also revealed that claims for more than £100,000 are now being settled more quickly and that insurers are focusing more on rehabilitation in personal injury claims.

These rises are seen against a backdrop of improved safety. Government statistics show a decrease of 19 per cent in the numbers injured or killed on British roads in the same period.