Insurers were hit with a fresh blow on Monday 15th July after the government changed the Ogden rate to a level which could lead to more problems in the insurance market. The government set the Ogden rate at -0.25% when Insurers had been expecting a rate of 0% and many had been modelling their rates on this expectation. The move could result in rate changes for those insurers that have been wrongly pricing their business in expectation of the 0% and it is thought it will lead to increased motor premiums and there is the suggestion that public liability rates will undoubtedly be affected too. It is surprising that the government has left it at a negative rate which doesn’t reflect the investment opportunities open to the claimant. Huw Evans director general of the ABI commented “This will remain the lowest discount rate in the western world, leaving England and Wales an international outlier at a time when we need to boost our attraction to international capital.”
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