Ogden discount rate increase "does not go far enough"

Posted: 17 July 2019

On Monday, the Ministry of Justice announced a slight increase from -0.75% to -0.25% in the Ogden discount rate, to be effective from 5 August. However, the latest announcement has been met with consternation, with industry experts commenting that the increase is not sufficient.

The Ogden discount rate is used to calculate the amount of compensation a victim will receive from their insurer to cover the cost of future care. The rate is set by the Lord Chancellor and was previously set at 2.5% before reducing to -0.75% in 2017. Even with the latest increase, this remains the lowest discount rate in the Western world, according to the Association of British Insurers (ABI).

Simon McGinn, General Manager, Commercial & Personal, said:

"We believe providing seriously injured people with a fair level of compensation is the right thing to do but the insurance industry is currently overcompensating. While today’s announcement has signified a move in the right direction, unfortunately the new rate of -0.25% does not go far enough.

"An opportunity has been missed to further tackle the increased cost of settling personal injury claims, which ultimately contributes to rising customer premiums. Whilst there was still some uncertainty, our approach was to maintain the status quo and reflect the current rate in our pricing until a formal decision was made""

Allianz CEO Jon Dye was one of a number of insurance industry leaders to sign a letter to the Lord Chancellor publicly committing to passing on to customers cost benefits arising from Government action to tackle the extent of exaggerated low value personal injury claims.

Expertise

Cyber crime - staying a step ahead

“It could be you”. A phrase once used optimistically for a national lottery campaign becomes rather more sobering when applied to the world of cyber-crime.

News

Allianz launches partnership with Plastic Surgeon

Allianz Insurance has launched a partnership with Plastic Surgeon, a specialist restoration company that focusses on engineered repairs to surface damage, rather than replacement.

News

Allianz research reveals 69% of motorists would accept a green car part to help the environment

Independent research commissioned by Allianz Insurance found the majority of motorists (69%) would choose the option of a green replacement part to repair their vehicle with protecting the environment given as the main reason (77%).

News

Allianz appoints Birmingham Claims Operations Manager

Allianz Insurance has appointed Hollie O’Neill to claims operations manager in Birmingham.

Expertise

Water - the great escape

Nick Lock, Head of Property Claims, wrote for Modern Insurance Magazine about how Commercial escape of water claims are increasing, plus some ways to mitigate the risk.

Press release

Allianz increases fraud savings

Allianz has announced fraud savings of more than £29.6m in the first half of 2019, an increase of £6.9m compared to H1 2018.

Press release

Allianz creates digital claims propositions role

Allianz Insurance has appointed Shelley Hughes to the newly created position of digital claims propositions manager

Press release

Electric vehicles to have audible warning systems

Electric vehicles will have to emit a noise at slow speeds under new EU regulations that came into effect in July.

Press release

Allianz names Heidi Shepherd as Commercial motor portfolio manager

Allianz has announced that Heidi Shepherd has been appointed to the role of Commercial motor portfolio manager.

Press release

Allianz recruits regional motor underwriting manager

David Harris has been named new regional motor underwriting manager for Midlands and the South West region.

Press release

Allianz appoints head of Birmingham Claims

Mark Cant's appointment is designed to strengthen the development of Allianz's Claims Handling Centres of Excellence.

Press release

Gang's liability claims dismissed

Four claimants have had their claims dismissed after being found fundamentally dishonest.

Press release

Allianz proposes changes to Claims structure

As part of the development of two Claims Handling Centres of Excellence in Birmingham and Milton Keynes.

Insight

Driving when tired

Statistics show that driver fatigue is a likely cause for one in five road traffic accidents. Causing injury or death by dangerous driving can result in a fine, a driving ban, or even a prison sentence.

Expertise

Drones and insurance claims investigations

Nick Lock, Head of Property Claims, discusses the advantages of using this technology.

Ogden discount rate increase "does not go far enough"

Follow us

Related articles