Date: 24 October 2018
(1) The Prudential Regulation Authority (‘PRA’) response dated 10 May 2017 to the Ministry of Justice consultation on ‘The Personal Injury Discount Rate: How it should be set in future’ is available below:
(2) Any estimate made by the Prudential Regulation Authority of the cost to insurers of reducing the personal injury discount rate from 2.5% to -0.75%.
The PRA produced a high-level estimate that the cost to insurers of reducing the personal injury discount rate from 2.5% to -0.75% would be around £1.8bn per annum. We would also expect an initial, one-off impact before reinsurance of between four and six times the annual cost. For some of the insurers, a significant proportion of this initial impact is likely to be reinsured.