UK - Motor insurance £3.5bn hit from discount rate
Monday, 06 19 2017, Category: Insurance and Reinsurance, Country: United Kingdom
Changes to the Ogden discount rate will cost insurers and reinsurers approximately £3.5bn, while premiums are predicted to rise by a further 9% this year.
That is according to estimates by EY, who say that around £2.4bn of losses have already been disclosed publically since it was announced that the rate used to calculate compensation claims would be cut from 2.5% to -0.75%.
The decision took insurers by surprise, and worsens an already difficult environment for an industry facing higher repair bills and a rise in whiplash-related claims.
Source: The Actuary