The Ogden Discount Rate
29 March 2017
What is the Ogden Discount Rate?
This is applicable where a severely injured person needs to have the necessary financial security to provide for their care and loss of earnings. The discount rate is used to calculate the amount of compensation they receive taking into account the return they will earn when that money is invested.
The Effect of the Change
The reduction means that those suffering from serious injuries will receive significantly higher compensation payments than before with insurers now having to effectively pay extra, rather than discount the compensation amount.
The increase affects any liability claims costs but particularly for Motor (as you know, the majority of motor claims involve an injury of some sort) which will see the brunt of the premium increases as a result of this ruling. Insurers are already increasing their premiums following this news. This is not a welcome change for you as Fleet operators, your insurers or ourselves as brokers alike but one that cannot be ignored.
If you have any queries about how this may affect you, or would like a review of your current policies, please call us today on 01905 611951.