Changes to the Personal Injury Discount Rate: April 2017 Update
Our Adviser explains recent developments including the opening of government consultation, current insurance market conditions, and how to protect your position.
The personal injury discount rate (PIDR) change from 2.5% to minus 0.75% came into force on 20 March 2017. As it stands, this means the cost of large personal injury claims (those with an element of future loss of earnings and care costs) will go up significantly. However, it is important to note that the majority of claims are smaller, attritional losses and these are unaffected by this change.
On 30 March the Ministry of Justice opened a consultation on the mechanism used to set the PIDR. While the consultation will only run until 11 May, it is important to note that any changes to the mechanisms that may be agreed as a result will require amendments to legislation or the passing of new legislation. Therefore, the impact of the current PIDR of minus 0.75% is likely to continue throughout 2017.
Our Adviser explains the basis of the consultation, current insurance market conditions, and how to protect your position.