How will the Governments decision on Ogden affect insurance premiums?
As you may be aware, the Lord Chancellor announced a reduction to the Personal Injury Discount Rate, which is used to calculate the amount of compensation to be paid to seriously injured individuals, and it applies retrospectively to all current claims, as well as new incidents.
It’s a significant change and affects the insurance industry as a whole, as well as its customers and claimants.
What is the Discount Rate?
The Discount Rate, also known as the Ogden Rate, forms part of the calculation to determine the level of award to claimants in respect of cases involving serious injury.
How does it affect you?
Insurers have suggested increased prices will be needed to tackle the discount rate cut. They maintain that claims costs will soar and that this will be need to be reflected in higher premiums. For consumers, Motor premiums are likely to increase for millions of drivers and businesses with adverse claims experience will also find there is pressure on pricing.
What can we do to help?
We have yet to see any major increase in our clients’ premiums as we have successfully mitigated any insurer attempts to raise costs. We will continue to push back against insurers and we will guide you through any wider market impacts as we learn more.
To discuss this in more detail, please speak to your usual Vista contact.