The Ogden Rate Change

Have you noticed your insurance premiums rising?

What has changed?

On 20th March 2017, a new discount rate came into effect following amendments to legislation, changing from 2.5% to -0.75%. (The last change was in 2001.)

This means that, rather than any lump sum award being discounted to allow for a 2.5% investment return, the indemnity settlement will be increased, reflecting a decision that over the long term there is predicted to be a negative return on investment.

The effect of this change has been to increase the value of claims for future financial loss, most significantly for younger claimants, for whom the settlement needs to cover the greatest length of time.

What is the Ogden Rate?

The Discount Rate, also known as the Ogden Rate, forms part of a calculation which determines the level of award in respect of cases involving serious injury. Claim settlements for injury are made up of a number of key components:

  • compensation for pain and suffering
  • future loss of earnings
  • future cost of care
  • ‘other’ financial support, either towards activities that cannot be performed as a result of the injury (i.e. driving, caring for dependents etc.) or the provision of additional support, such as prosthetics.
  • legal and professional fees.

What can you do?

This change is legislative, so it affects everyone. The insurance companies are left more exposed, which means they must pass on the cost. This affects the end-user who will see their premiums rise, in some case quite significantly.

That said, larger firms of insurance brokers with a more diverse choice of insurance companies to chose from, may be able to find more competitive prices for premiums to minimise the impact.

Finch Group & Ogden Rate Changes

Because we work with a diverse portfolio of clients, we have created relationships with a number of insurance companies, from large well-known brands, to niche market players who offer bespoke insurance policies with less general exposure to the Ogen Rate change.

We can’t promise we can beat an existing policy that is affected by the Ogen Rate change, but we can promise we will use our entire network to ensure we try.

Why not challenge us to try?

Simply fill in the form with a brief overview and one of our most experienced brokers will be in touch.

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