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ABI responds to personal injury Discount Rate announcement

New rate bad news for insurance customers and taxpayers

Commenting on today’s Government announcement that the Discount Rate used to assess compensation for serious personal injury compensation has been set at minus 0.25% (previously minus 0.75%),

Huw Evans, Director General of the Association of British Insurers, said:

Huw Evans, Director General

“This is a bad outcome for insurance customers and taxpayers that will add costs rather than save customers money. A negative rate maintains the fiction that a claimant and their representatives will knowingly choose to invest their damages in a way that would guarantee losing them money. This will remain the lowest Discount Rate in the Western world, leaving England and Wales an international outlier at a time when we need to boost our attraction to international capital.”


The Discount Rate reflects the return that personal injury claimants can typically expect to receive when they invest their compensation. A lower rate leads to higher insurance costs.

On 27 February 2017, the then Lord Chancellor reduced the Discount Rate used to calculate compensation for serious personal injuries from 2.5% to minus 0.75% - the lowest rate in the Western world. A review of how the Rate should be set in the future was then initiated by the Government.

Following a consultation, in September last year the Westminster Government announced proposals to deliver a personal injury compensation system that would be fairer for claimants, customers and taxpayers alike. The actions of that review were actively implemented through The Civil Liability Act 2018.


Notes for Editors


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Last updated 15/07/2019