As I’m sure you’re aware, the Government recently announced that the Ogden discount rate will reduce from 2.5% to minus 0.75%, from 20 Mar 2017. Unfortunately, the scale of the reduction is greater than expected and this means there’ll be a substantial increase to the cost of personal injury claims relating to all motor and liability products.
There’s no doubt that this is disappointing for insurers and consumers alike, as soaring claim costs will result in an increase in motor and liability premiums.
When will premiums increase?
As the impact of the change in the discount rate is effective almost immediately, we’ll be making price adjustments as soon as is practicably possible.
What action are we taking?
- We’ve been lobbying the Government alongside the ABI and this effort will continue despite the announcement
- Steve Treloar, Managing Director of LV= General Insurance, has met the Chancellor Philip Hammond along with the ABI and CEOs of other insurers
- We believe that the method used by the Ministry of Justice to set the discount rate is obsolete and in need of reform
- We’ll continue to push for the MoJ to work with all parties to agree a fair way forward
Click here for more information about the Ogden rate reduction.
The changes here are very unwelcome. We’ll continue to lobby hard for a fairer approach and will keep you updated with any future changes.