[article]
http://www.bbc.co.uk/news/business-39101829
Insurance premiums set to soar after compensation changes
Average car insurance premiums could increase by up to £75 a year as a result of a government ruling, industry experts have said. A new formula for calculating compensation payments for those who suffer long-term injuries has been announced by the Ministry of Justice. But the Association of British Insurers (ABI) called the decision "crazy". The Ministry of Justice said it had no choice under the current law, and said it would consult on possible changes. Shares in insurance companies fell, with some saying that profits would be hit by millions of pounds.
When the victim of an accident is awarded compensation in a lump sum, the discount rate reduces their payout. This is to make up for the extra money they could make by investing that lump sum over many years. The Ministry of Justice has decided to reduce the discount rate from 2.5% to minus 0.75%. This is because the formula is based on gilt yields, or the interest rate on government bonds.
By the time inflation is taken into account, real returns on such bonds have become negative.
[/article]
Ahhahahahhaaaaaa I've been waiting for the results of this consultation for years. Ahhaahhahaha this is close to being the best day of my life. On an article I started reading thinking oh for fucks sake more expense. But hahahahhahahaha
My lump sum was £2m and I had to discount it down to £1.6m. Because of that bastard 2.5%. But now, good lord hahhahaha the discount will take it up to over £2m hahahahahhahaha -0.75% great scott ahhhhahaha -0.75% aaaaaaaaaahhaahahaaa
http://www.bbc.co.uk/news/business-39101829
Insurance premiums set to soar after compensation changes
Average car insurance premiums could increase by up to £75 a year as a result of a government ruling, industry experts have said. A new formula for calculating compensation payments for those who suffer long-term injuries has been announced by the Ministry of Justice. But the Association of British Insurers (ABI) called the decision "crazy". The Ministry of Justice said it had no choice under the current law, and said it would consult on possible changes. Shares in insurance companies fell, with some saying that profits would be hit by millions of pounds.
When the victim of an accident is awarded compensation in a lump sum, the discount rate reduces their payout. This is to make up for the extra money they could make by investing that lump sum over many years. The Ministry of Justice has decided to reduce the discount rate from 2.5% to minus 0.75%. This is because the formula is based on gilt yields, or the interest rate on government bonds.
By the time inflation is taken into account, real returns on such bonds have become negative.
[/article]
Ahhahahahhaaaaaa I've been waiting for the results of this consultation for years. Ahhaahhahaha this is close to being the best day of my life. On an article I started reading thinking oh for fucks sake more expense. But hahahahhahahaha
My lump sum was £2m and I had to discount it down to £1.6m. Because of that bastard 2.5%. But now, good lord hahhahaha the discount will take it up to over £2m hahahahahhahaha -0.75% great scott ahhhhahaha -0.75% aaaaaaaaaahhaahahaaa
