LONDON Feb 27 Britain on Monday changed the
rate at which compensation payments are calculated in personal
injury claims, a move likely to increase the size of lump sum
pay outs and potentially hit UK motor insurers' profits.
The Ministry of Justice cut the discount rate used to
calculate lump sum payouts to minus 0.75 percent from 2.5
percent, it said in a statement, a rate that had been in place
A downwards move in the discount rate is expected to force
insurers to pay out more in cash to personal injury claimants
now to ensure that returns over their lifetime met the awarded
"The current legal framework makes clear that claimants must
be treated as risk-averse investors, reflecting the fact that
they may be financially dependent on this lump sum, often for
long periods or the duration of their life," the Ministry of
Admiral said on Monday it was postponing the
publication of its annual results as a result of the change, to
March 8 from March 1.
It estimated the net financial impact on 2016 reported
profit at 70-100 million pounds ($86.96-124.23 million).
Direct Line last week postponed the release of its
annual results until after the results of the review.
It said in a statement on Monday it would update the market
later in the day on the implications of the change.
($1 = 0.8050 pounds)
(Reporting by Carolyn Cohn; Editing by Rachel Armstrong)