Insurers sign pledge to pass on Civil Liability Bill savings


The CEOs of 26 major insurers have signed a pledge promising to pass on savings from the Civil Liability Bill to customers.

Allianz Insurance chief executive Jon Dye and others signed the letter to justice secretary David Gauke earlier this week, publicly pledging to pass on savings to customers. Whiplash reforms and changes to the way the personal injury discount rate is set, coming in the form of the Civil Liability Bill and secondary legislation, could save a policyholder as much as £35 per year.

The letter said: “We remain committed to the principle of 100% compensation for victims of catastrophic injury but we also want to see a modernised framework that is fair for everyone who buys insurance. If the government’s proposed changes are implemented, we believe this will deliver on this principle.”

“Serious injury claimants will still benefit from one of the most generous compensation systems in the world and one which would be roughly 50% more generous than it was just over a year ago. Those who wish to will still be able get permanent annual payments, such as PPOs, and young victims with long life expectancy would nearly always be advised to do this. The size of these payments is not affected by the discount rate.”

“Subject to any commercial responses made when the government stated its intention to change the framework, the government’s reforms for setting the personal injury discount rate may also assist individual companies in relieving some of the future cost pressures on motor and liability insurance for ordinary customers.”

Simon McGinn, general manager at Allianz Insurance, commented: “Allianz’s objective has always been to compensate genuinely injured people quickly and fairly without influence from disproportionate legal costs, so we welcome the whiplash claims provisions within the bill.”

“The principle of fairness is also embodied in the industry’s position on the discount rate and the measures announced provide a structure around which this can be achieved. We look forward to seeing the bill progress into law and to the benefits that will accrue to customers as a result.”

Announced on 20 March, the Civil Liability Bill will set fixed amounts of compensation for whiplash claims and ban the practice of seeking or offering to settle whiplash claims without medical evidence.

The Civil Liability Bill also includes changes to the way the personal injury discount rate is set, moving it from index-linked gilts as a proxy for the returns that can be expected from a very low risk investment strategy, to low-risk diversified portfolios.


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Mark Dugdale is the editor of Claims Media. Mark welcomes articles, letters or feedback from readers and can be reached via