Ogden Rate Change Set To Affect Premiums in Norwich, Norfolk

Posted 13/04/2017

In March 2017, the government made a significant change to the Ogden Rate, used as part of the calculation to determine the amount of compensation to be paid to seriously injured individuals.

They have changed the Ogden Rate from 2.5% to -0.75%.

WHAT IS THE OGDEN RATE?

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

  •  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

When assessing future loss of earnings, the courts multiply the amount they consider the claimant will lose each year by factors such as their age and their life expectancy. Similar factors are applied to the amount required for future cost of care and it can be therefore equate to a considerable amount of money. As a result, an allowance is made by the courts in respect of future losses to reflect the fact that the claimant will be able to invest the lump sum awarded and earn interest on that investment over a period of time. The settlement is therefore ‘discounted’ by the amount of interest the claimant can expect to earn over that period. It is this adjustment which is known as the Ogden Rate and that is subject to the recently announced changes.

HOW DOES THIS AFFECT ME?

The Ogden Rate applies to injury claims, so any product which provides cover for Motor (including Motor Trade) or Liability (Employers’ Liability and Public & Products Liability) will be affected. This also includes Property-led products such as Property Owners and Landlords where liability cover is included. This means to account for the increase in potential claims, we are now recommending all liabilities be rated at £5,000,000 to mean you are not left in the lurch should a claim occur.

Due to the increase in claims payments, insurers are also inevitably having to increase their premiums. However, the exact amount of this will depend on a range of factors, including trade activities, approach to risk management, previous claims history and exposure to serious injury claims. But if the cost of large losses increases, then so must the contribution that everyone makes. This, unfortunately, therefore includes low risk and claims-free cases.

Should you have any questions, please feel free to contact the team on 01603 954054 who will be happy to help.


Back to Latest News
Ogden Rate Change Set To Affect Premiums

Raffi Coverdale - N F Coverdale Ltd

The service we have experienced with the overall approachability and dedication of Sue and all of you at Drayton Insurance Services was second to none - I very...

Read More

Rachael - Page Bros

My car insurance was up for its yearly renewal and I received a great estimate from my current insurer. I felt I would ask Drayton for an estimate, just in case...

Read More

Stuart Edge - No Letting Go - Norwich

Incredible Service On Monday 4th August 2014 I, or more correctly my car, was involved in a road traffic collision when a car reversed into my parked car. Fort...

Read More

Olufemi Ola - Just Another Label T/As The Dance Music Library

Big up Drayton Insurance Ltd, for smashing my original business insurance premium by over £600.00, which is a third of what my previous insurance company quoted...

Read More

Roly Le Roy

Claim forms are always difficult because they generalise and never fit with what you're trying to say. However, the Drayton Insurance Services experience is not...

Read More

Raffi Coverdale - N F Coverdale Ltd

Our Company has used Drayton Insurance Services for the majority of the 28 years that we have been trading. During this time we have grown from 6 employees and...

Read More

Mr Mark & Jeanie Underhill

Grahame is the best agent I have dealt with. Giving clear information, he is understanding and polite - an asset to the company.

Read More

Martin Wink - Anglian Coatings

I would like to thank the team at Drayton Insurance for the work they undertook in sourcing my public liability insurance.Nanotechnology coatings was not someth...

Read More

Carl Rich - Nurture Financial Planning

It gives me enormous pleasure to write this Testimonial for Drayton Insurance Services.Not only did they take the hassle of having to do all of the running arou...

Read More

Jan Rout - Property Owner

I was very impressed with one of your sales team, Tom. I have a thatched holiday cottage that I let which was proving hard to insure as so many insurers have st...

Read More