Government should settle discount rate between 0-1%, say claims managers

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A poll conducted by BLM has found that UK claims managers want an increase in the contentious rate to between 0-1%.

In a survey carried out as part of a webinar hosted by the defendant law firm, nearly two thirds of claims managers and insurers said that the discount rate would, and should settle somewhere at that level.

Three in ten would opt for an increase to 1-2% instead, while only 1.6% of those polled believed the rate would settle at the previous level of more than 2%.

Alistair Kinley, director of policy & government affairs at BLM, was quoted by youTalk Insurance as having said that the poll’s findings were “really striking” as claims managers believed that a positive discount rate needed to be put in place urgently.

“The Government’s recent discount rate consultation was about the principles of setting the rate, such as the 100% compensation approach and ensuring fairness for claimants and defendants,” said Kinley.

“A really key aspect is the underlying investment assumptions for damages. While now have an indication of where our audience believes the rate will settle, what’ll be interesting to learn more about is whether the Government is considering new benchmark investment assumptions and what effect those would have on the discount rate.

“We know that the discount rate is high on the Government’s agenda, with Justice Minister Lord Keen confirming this month that ‘an announcement of the Government’s conclusions will be made at the earliest possible opportunity.’ And we think it’s a very realistic prospect that those conclusions, when announced, will point to new legislation ­– most likely the Civil Liability Bill from the recent Queen’s Speech.”

 

 

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk