You may have heard in the media that insurance premiums will be on the increase, for people outside our industry this just appears to be insurers increasing premiums across the board because they can. The reality is actually somewhat different.
How does this affect your premium?Clearly it is still early days but one thing is certain, policies that have the ability to cover injury will be affected by the change. Anything that has a Motor element is an obvious class of business to see an increase, but the effects to business can be wide, Manufacturing, Construction, Haulage to name a few. Wherever cover is provided such as Public & Products Liability, Employers Liability and Motor will see premium increases.
Why it’s happeningIn February 2017 the Lord Chancellor Liz Truss changed the Discount rate which is used to calculate the amount of compensation that is paid to injured individuals.
The discount Rate forms part of the calculation to determine the level of award in respect of serious injury, although made up of many reasons it’s based on the cost of care, loss of earnings amongst others.
When calculating the loss of future earnings the courts use the Ogden Rate to assess future losses, so the younger the person injured the longer potential loss of earnings. Where injuries are so severe there is potential that the individual will not work for the remainder of their life. The cost of annual care is significant estimated approximately £75,000pa*
An allowance is made by the courts of future losses to reflect where the claimant will be able to invest the lump sum injury payment and earn interest over a period of time. Any settlement awarded is discounted by the amount of interest the claimant can expect to earn, this is known as the discount rate and is linked to investment returns.
So what has changed?Until 19th March 2017 the discount rate was 2.5%, this has now changed to -0.75% on or after 20th March, in simple terms where a discount rate was being applied to an award this now in effect has increased the award, not reduced it.
The impact on insurers will be considerable, below are a few examples that will give an idea of the increases.
30 year old construction worker with traumatic brain injury, settlement before change £2.4m, after the change £6.14m
18 year old with spinal cord injury, settlement before change £7.6m, after change £19.3m
55 year old male who sustained a below joint amputation before change £1.4m after change £2.05m
(Examples provided by Axa Insurance – March 2017) The change in the discount rate has made a significant increase to the amount of settlements made by insurers in respect of serious injury.
The overall effect is that the cost to the insurance industry is in £Billions.
It goes without saying that these added costs have to be paid from somewhere; the only place they can come from is increased premiums.
Let us manage your premium increases.*Allianz March 2017
What is Vishing?
The existing problem of vishing is on the increase, it’s not a new problem just a variation of the changing digital world where un-authorised persons use the phone for irregular business.
Vishing is a persuasive form of manipulation to get private, personal and financial information over the phone; they’re cold calls where personal information is extracted during what seems like a normal conversation.
You may have experienced a call, text or email of this nature before, offering thousands of pounds in compensation for an injury you may or may not have suffered. They’re primarily made by marketing firms or claims management companies who make contact with many people, regardless if you’ve been in an accident or not.
Vishing is not restricted to any single industry, callers impersonate many financial institutions, the Police and other well known trusted companies.
What to do if you experience a call?
If you’re subjected to a vishing/nuisance call;
The following sites provide additional information and guidance;
Independent Regulator and Competition Authority for the UK communications industry.
An independent organisation which works on behalf of the consumer to make individuals as powerful as the organisations they deal with.
You will now be subject to 6 points on your license, plus a fine, for using your phone while driving
If you are caught using your phone while driving, you can look forward to receiving 6 points on your license as well as a fine.
With this in mind, we would like to give you a few tips on how to avoid any of these penalties
- Use a hands-free system – Use a hands-free system, whether that’s in-built into your car/van, an accessory for your car, or one available on your phone.
- Pull over, and turn the engine off – If you need to text, don’t have a hands-free system, or need to use your phone for any other reason, pull over and turn your engine off. If your engine is on, you may still receive a penalty.
- Put it away – If you don’t need to use your phone while driving, then put it in your glovebox, or some other location where you cannot see your phone light up when your receive a message.
If you employ drivers, you should make sure that they are aware of the new regulations to avoid them being caught out.
Preparing for Storm DorisFeb 23rd – 2017
As most of the UK will be effected by Storm Doris within the next 24 Hours bringing high winds and heavy rain, we would like to assist our customers with adequate property cover in the event of any damage.
We’re anticipating an increase in claim calls over the next few days, however to get your claim sorted quickly, please follow the below: For Storm Claims: Gather as much information as possible before notifying us of a claim. Obtain quotes for repairs (Verbal or written) Call us on 01623 397300 and discuss your claim.
For Flood Claims: Call us immediately on 01623 397300 or email us on email@example.comMonitor developments of Storm Doris by visiting MetOffice.gov.uk