LEGAL


Lower discount rate for personal injury claims


Mike Dickinson (pictured), Sales and Marketing Director at Nottingham- based insurance broker Russell Scanlan, reviews the recent Government announcement of a change in the compensation discount rate.


The Lord Chancellor recently shocked the insurance industry by announcing changes to personal injury compensation payments, with the inevitable result of increased cost of insurance to customers. As of 20 March, the Discount Rate – a


calculation which takes into account the interest claimants can expect to earn on the amount of compensation money they receive if they invest it – will be lowered from 2.5% to -0.75%. Already, a delegation of 12 insurance company CEOs has arranged to meet with Justice Secretary Liz Truss to voice concerns about the change. The Discount Rate has not been changed since 2001. Since then, the insurance industry has put forward its case that lowering the rate will increase insurance costs for businesses and individuals and have a definite impact on the affordability of certain types of insurance. However, against a backdrop of commonplace low investment returns, the decision has officially been made by Government to lower the rate. Russell Scanlan’s advice to businesses is simple: plan


now for the rise in premiums which will come as a result of this rate change. It is unclear how much premiums will rise, but it is certain they will and they could be significant. In particular, this change will impact motor employer liability and other forms of liability claims. Insurers will have to revisit claims


reserves that are outstanding and assess them individually in light of this new legislation. A £1m claim could now get settled for as much as £1.8m – so there needs to be enough


reserves to cope with this. When changes such as this hit the marketplace, it is wise to assess all


insurance policies and book a meeting with an insurance broker to make sure the most


cost-effective and appropriate arrangements are in


place. Using a broker means you are going to get the most competitively priced policy, tailored to your business. If you are a business with a high claims history, it is


now even more important to make sure your ducks are in a row in terms of your workplace insurance policies.


Since 1998, Nitto Denko UK Ltd., has been setting the global standard in the material conversion industry. Converting more than one million parts per day, Nitto Denko UK Ltd., has the experience and a customer driven work philosophy to help you manufacture the highest performing components for your industry. In 1999, we became ISO/QS9000 registered. Then in 2006 we became certified to TS-16949, we also achieved our ISO-14001 certification in Jan 2010.


Mission Statement 'contribute to customers' and value creation with innovative ideas' What we do:


• Converting of Nitto materials and other Japanese & European materials, trading worldwide. • Dealing directly with OEM's and major tier 1 suppliers in the automotive industry. • Our company philosophy involves extensive customer service and high quality in our products and procedures. • Belief in the importance of quality allows us to continue our dedication to quality improvement. • Importantly, we place safety before everything else.


Please contact us for further information, the following personnel have a wealth of industry experience between them and would be happy to deal with your enquiries:


Matthew Carless - EMEA Japanese OEM Team Leader Telephone: 07415 384690 • email: matthew_carless@nittoeur.com Danny Draper - Production Manager Telephone: 07432 141324 • email danny_draper@nittoeur.com


Nitto Denko UK Ltd, Sunrise Building, Crown Farm Way, Crown Farm Industrial Park, Forest Town, Nottinghamshire NG19 0FT Telephone: 01623 415500 • W: www.nitto.com


business network April 2017 49


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