Today’s announcements on the Discount Rate and the long-awaited Whiplash reforms are undoubtedly welcome.
It is likewise truly gratifying that the government has listened to the industry’s concerns so that no-one will be unduly under or over compensated.
Measures to amend the Discount Rate and the way it is set is good news for customers. Since the sudden rate change last Spring, we have seen an uplift in the cost of claims particularly in motor and casualty which, in turn, impacts the cost of premiums and the affordability of insurance.
The legislation will also introduce reforms to speed up the process and contain the cost of Whiplash claims. In the last year, faced with a negative discount rate, Zurich stood firm safe in the knowledge that it is a financially strong company where its ability to pay claims would not be diminished. However, this remains a pleasing dose of realism on behalf of the UK Government.