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).
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.