|[April 10, 2017]
A.M. BestTV: Ogden Rate Changes Will Hurt Results But Boost Premiums, Says A.M. Best Analyst
In this A.M.BestTV episode, Myles Gould, senior financial
analyst, A.M. Best, said recent statistical changes that raise
payouts for injury claims in the United Kingdom will affect non-life
insurers, but are not expected to trigger rating changes. Click on http://www.ambest.com/v.asp?v=ogden417
to view the entire program.
The U.K. non-life insurance industry Ogden rate, which calculates the
lump sum payments for personal injury claims, was recently cut to-0.75%
"For U.K. insurers, A.M. Best expects to see an impact on earnings and
capitalization in the immediate future," said Gould. "In addition, over
the medium term it is likely that there will be deterioration in the
performance of those lines that are affected as a result of higher
claims settlements from increased levels of compensation payout for
Gould also said he expects to see an increase in premium rates, as
insurers try to offset the deterioration in their company's performance.
The industry Gould believes will be the most severely impacted is the
U.K. motor book. However, he sees other liability classes that encounter
bodily injury claims also affected.
To read the Best's Briefing, titled, "Reserve Strengthening to
Follow U.K. Personal Injury Discount Rate Change," go to http://www3.ambest.com/bestweek/purchase.asp?record_code=259155.
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reports, targeted topics and key developments in the (re)insurance
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View A.M.BestTV episodes at http://www.ambest.tv.
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Copyright © 2017 by A.M. Best Company, Inc. and/or its
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170410005931/en/
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