Allianz’s head of motor discusses personal injury discount rate changes
Posted on: 22 June 2017
Jon Dye, head of motor at Allianz UK, calls the changes to the Ogden discount rate, announced in February, "an unexpected change that caused a major shock" in his recent blog post for Fleet News.
The change, which took effect from 20 March 2017, meant the rate, which is used to calculate the amount of compensation a personal injury claimant receives to reflect the return they will earn when that money is invested, was reduced from 2.5% to -0.75%.
Read our article about the rate change, posted soon after the announcement, for further explanation of what this implies.
Jon begins the article by emphasising that "Allianz firmly believes [it] is only right and fair" that compensation is calculated so that "the severely injured [can] fund their ongoing care needs and their loss of earnings for the rest of their lives", before going into detail as to why Allianz believes "that the thinking behind the calculation of the Discount Rate is flawed".
It is important to establish that reducing the Discount Rate will ultimately be met by customers and tax payers.
The scale of the change is already having a significant impact on all lines of business which deal with bodily injury claims.
This includes Private and Commercial Motor, Motor Trade, Casualty (Employers Liability, Other Liability and Contractors Liability) and SME insurance."