AXA’s David Williams responds to change to Ogden Rate

UK-Government-announces-changes-to-discount-rate

Lord Chancellor David Gauke announced on Monday 15th July 2019 that the discount rate would go from minus 0.75% to minus 0.25% on 5th August 2019.

In response David Williams, Managing Director of Underwriting & Technical Services at AXA Insurance, commented:

“The Lord Chancellor's announcement today is disappointing to say the least and doesn't provide the equality of compensation that we would have hoped for and expected.

"A negative rate simply does not reflect the economic reality of the investment opportunities for those receiving lump sum payments and, whilst reform was certainly needed to ensure fair compensation for accident victims, the rate announced today causes other problems.

“Minus 0.25% is below the level that most commentators were expecting, below the rate insurers have been using for pricing, and below the level most claims have been settling at whilst we awaited the announcement.

“The new rate sadly may stop the reduction in motor insurance premiums we have seen in recent months, as well as placing a huge burden on the NHS.”

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