Lord Chancellor David Gauke recently announced a new Ogden Rate (also known as the Discount Rate) of -0.25 per cent for personal injury awards. This new rate, which represents a 0.5 per cent increase from the previous rate of -0.75 per cent, came into effect on 5th August 2019. The government made the decision to increase the Ogden Rate after the old rate led to concerns that victims of life-changing injuries were being significantly overcompensated. But a smaller than expected rise in the rate has resulted in disappointment from insurers.
There was a general expectation in the market that the new rate would be between zero and 1 per cent. As a result, many insurers believe that claimants will remain overcompensated with the new rate. In terms of employer implications, insurance experts estimate that the new rate will cause motor insurance premiums to increase for both UK drivers and businesses. But ICB Group will do everything in our power to keep your premiums low, such as offering risk management guidance and sample policies to limit your risk.
Read our previous article on the Ogden Rate increase:
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