Insurance companies were quick to complain about the impact on their finances of a cut in the ‘discount rate’ that is used to calculate the compensation paid to serious personal injury victims. Despite this, however, one of the UK’s largest insurers, Admiral Group, has announced a 2% increase in profits for the six months to 30 June 2017 compared with the same period last year.
The proposed lowering of the rate from 2.5% to minus 0.75% meant significant increases in the amounts that insurers would have to pay out. Predictably, the insurance companies were not happy about this and, as Bruce Lance’s personal injury team reported back in July, the Ministry of Justice announced a consultation on the subject. (See this article.)
Eamonn Clifford from Bruce Lance’s personal injury department believes that the increased profit figures from Admiral are evidence of insurance companies wanting “to have their cake and eat it”. Admiral is not alone among insurance companies in posting increased profits so it is hard to sympathise with them when they complain about the impact of the change in the discount rate on their results. (Particularly when they continue to hike our car insurance premiums, citing difficult market conditions…)
An announcement on the future level of the discount rate is due soon and we will keep you posted.
If you have suffered personal injury as a result of an accident that was not your fault and would like to find out whether you are entitled to compensation, please see our Personal injury page.
Alternatively, please contact:
Eamonn Clifford by email or on 01494 450494 (High Wycombe)
Andrew Goss by email or on 01202 679379 (Poole)