Changes to Ogden rate...again
I have bleated before about the Ogden rate which, in simple terms, dictates the size of personal injury claims awarded and provides a framework for calculating injury claims where there is long term detriment.
The rate has recently changed again having been slashed from 2.5% to -0.75% in March 2017. It now stands at -0.25%.
This is disappointing for the insurance industry as they were expecting a return to positive figures so will continue to have to pay larger sums for long term injury claims.
As an example, a 26 year old male paraplegic unable to return to work may have been entitled to a claim of £7.2m whilst the rate stood at 2.5% but would receive nearly £15m at a rate of -0.75% and still £13m at the current -0.25%.
This clearly has a major impact on the profitability of insurers and at the end of the day, this can only mean one thing - increased premiums for all.
Watch this space for further news but there continue to be increased pressure on insurance premiums across the board.