Latest News

Propertymark's predictions for 2019

12 December 2018

Last week, we took a look back at 2018 and analysed how the market has changed over the last 12 months, but today we're peeking into our crystal ball, to see what's to come in 2019. Read More...

Is Help to Buy distorting the market?

12 December 2018

Last month, Government figures reported that more than 400,000 people have now been able to purchase their first home by using one or more Help to Buy scheme. Read More...

Northern Ireland's House Price Index continues to rise

10 December 2018

Northern Ireland's latest quarterly figures, released by Land and Property Services, evidence the continuing growth in the sales market in Northern Ireland as a whole. Read More...

 

Personal injury law and you

Monday 07 August 2017

On 20 March 2017, the Justice Department announced changes to the personal injury discount rates applied to lump sum compensation awards.

The discount rate works on a percentage reduction to allow for the estimated return on investment of this sum over the future loss period.

For example, if an individual earning £25,000 per annum is seriously injured in an accident and unable to resume work with long-term care at £75,000 per year, on the basis of the current discount rate of 2.5 per cent, the loss of earnings and care claim would amount to £2,791,000. However on the new discount rate of minus 0.75 per cent, the claim cost increases to £6,325,000, a rise of 127 per cent.

Who will actually be affected?

The change relates to any claim settlements post 20 March 2017; as a result of which, insurers are making significant increases to their current claims reserves. The Association of British Insurers estimates the total cost to be as much as £7 billion.

Insurers are announcing substantial increases to their claims reserves directly resulting from this change. The Treasury have announced that the impact to the NHS is likely to be an increase of £1 billion in medical negligence claims. This will impact policyholders with an increase in claims reserves under Motor and Liability policies – for example Employers liability and Public liability, which most estate agents hold as a business. This will inevitably lead to increased premiums, however it’s too early say what the scale of increase will be across the industry. 

What next?

Whilst the new rate came into effect on 20 March 2017, it is possible it may not be in place for long. The insurance industry, through the ABI, continues to lobby government who have approved an urgent review, involving consultation with interested parties to identify whether there is a better and fairer framework for establishing the discount rates.

This increasing pressure on claims costs further highlights the need to engage in active risk management in reducing claims frequency and severity – an active profile will provide buyers with an edge in the market.

Insurance experts Arthur J. Gallagher will continue to monitor the situation and will keep members informed of developments. Your Account Manager is available to identify how best to mitigate this issue and to ensure the best possible solution is achieved.

For more information about insurance coverage that can be provided to estate agents via for Propertymark members scheme, please call Arthur J. Gallagher & co on 01384 822 206 or email them on propertymark@ajg.com.