Media Release 2 December 2024

IUA RESPONDS TO DISCOUNT RATE ANNOUNCEMENT

The International Underwriting Association has welcomed the announcement of a new Personal Injury Discount Rate for England and Wales. The rate is used by courts to calculate lump sum compensation awards in personal injury cases and now stands at 0.5%.

Dave Matcham, Chief Executive of the IUA, said: “The discount rate is a crucial factor to consider for IUA members covering personal injury losses. Stability in the rate is vital, both for the purposes of reserving against the liabilities of claims incurred and for pricing future business.

“This new rate of 0.5% will now be fixed for the next five years and aligns England and Wales with rates set separately for Scotland and Northern Ireland. There was a statutory deadline of 11 January 2025 for the review and early confirmation of the change is welcome. Companies will now be in a better position to plan for the forthcoming end-of-year renewal season.

“Setting the discount rate at an appropriate level is vital to avoid driving up the cost of insurance for policyholders across the market. The IUA has always supported a rate which fairly reflects the ‘100% compensation principle’ which states that claimants should neither be overcompensated nor undercompensated. Indeed, Lord Chancellor Shabana Mahmood’s statement today agrees that payments are expected to fulfil this principle “no more and no less”.

The IUA responded on behalf of its members to consultation exercises around the setting of the discount rates in England and Wales, Scotland and Northern Ireland.

Ends

Contact:
Scott Farley
Director of Communications
International Underwriting Association
Tel: 0207 617 4449
Mobile: 07921 699 218
E-mail: scott.farley@iua.co.uk

Notes to Editors:
About the IUA
The International Underwriting Association of London (IUA) is the representative body for companies in London providing international and wholesale insurance and reinsurance coverage. Its mission statement is to secure an optimal trading environment for London insurance companies.