Ogden Rate News and What you Need to Know
You may well have heard news recently about the change in the Ogden Rate.
If you’re outside of the arena of insurance, the very term may be hugely baffling.
It’s a rate used to work out the returns on investments for accident claimants who receive a compensation ‘lump sum’.
The amount received by each claimant is adjusted, based on the interest that person would anticipate earning if they were to invest it.
Ultimately, it means the higher the Ogden Rate, the less insurers pay out.
This week we saw the rate cut to -0.25%, creating something of a shock in the industry.
Analysts now say it will mean insurers paying out more, and potentially, premiums having to rise.
The rate comes into effect in August this year, but you can expect plenty of industry moaning and groaning in the coming weeks.
In fact, back in 2017 when the rate was adjusted, a number of insurance firm CEOs took their annoyance to Downing Street!
Watch this space for more information.