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“Personal injury compensation reforms announced The Lord Chancellor and Justice Secretary, David Lidington MP, will later today lay draft legislation before Parliament to change the way in which the personal injury discount rate is set. If enacted, the draft legislation will change the way in which the personal injury discount rate prescribed under section 1 of the Damages Act 1996 is set. Based on the evidence currently available the Government would expect that if a single rate were set today under the new approach the real rate might fall within the range of 0% to 1%, but the new framework will only apply if the proposed law is enacted and will not operate retrospectively. Further details of the reforms will be set out later today on the gov.uk website” A WMS will be made later this morning. Paul Hughes Civil Law Team, Civil Law and Justice, Administrative Justice, Coroners, Burials, Cremations and Inquiries Division, Access to Justice 3rd floor 102 Petty France London SW1H 9AJ 07580 906942 or 020 3 334 3198
rumours in the legal profession are that the discount rate review is out tomorrow. A statutory reversal of wells v wells will be required in order to raise the rate. The current rate of -0.75 will cost the NHS more than 5bn - expect a statutory reversal before the summer - with the new rate set at 1% - 1.5%. A good day to buy before the review is announced? We shall see. A rate set at 1% will mean changing the 2016 accounts and payment of a special divi imo.
That's the point. The discount rate is only applicable in cases with life changing injuries. Someone who has suffered a brain injury and is unable to work is entitled to a future loss of earnings claim. The majority of the claimants receive a lump sum which is discounted to take into account mortality, age, and early receipt. For years claimants have been under compensated because the future loss was based on an assumption that the claimant would earn interest based on a rate set in 2001. That said to say I was shocked at a negative interest rate was an understatement. See meeting between insurers CEOs and Hammond yesterday, expect discount be set at 1.5% by Easter
Is this it? Discount rate slashed this morning which should mean shares fall
The discount rate is set by the Lord Chancellor. It is used to calculate future losses in large PI cases. When receiving damages a Claimant is assumed to be able to invest his/her money and achieve a certain level of investment - the rate is the discount rate currently 2.5%. Claimant's have argued this is too high as the current rate of return is about 1% in conservatively managed funds. If the rate is lowered the level of compensation to be paid is higher as the level of estimated return is lower. The Lord Chancellor was due to decide to change this rate at the end of January, however the ABI have launched a Judicial Review this is due to be heard before the end of the month. http://www.postonline.co.uk/post/news/2479748/lawyers-condemn-abis-scrooge-like-discount-rate-legal-challenge What the market is overlooking is the benefit to insurers from the proposed Govt reforms of soft tissue injuries and increasing the small claims limit for all PI claims to £5k. This is a game changer and is likely to save RTA insurers £15bn over the next 10 years. Changes to be announced at beginning of April. This will enable DLG to increase its divi year on year. Expect 18p+ divi to be announced on 28.2.17. Each time they increase the divi the shares increase only to fall back as the market cannot accept that this firm yield's 9%. After the next two divi announcements I expect the market to believe and the share price to be more than £5 by the end of the year. Please note if you want a punt at a takeover target look no further than esure - hedge funds are circling and the firm is likely to be taken private this year assuming the buyer is willing to pay £5+
I don't expect any news until new year. £1.85bn would be a fair price. The MOJ consultation in reducing the number and cost of low value personal injury claims will no doubt assist when implemented next year. If a hedge fund is thinking of making an offer they will want to do so before the final divi and before the £ recovers, assuming its US based.
Deliberately undervalued, this will company will be subject to a takeover before next dividend is paid by a US based hedge fund, the only question is the price, £4.50 would appear reasonable? Enjoy
probably the best run company in the ftse Financial highlights  Gross written premium from ongoing operations1 up 1.7% to £3,152.4 million, with 4.8% growth in Motor for 2015 and 7.1% in the fourth quarter. Motor and Home own brands in-force policies up 1.4%  Operating profit from ongoing operations increased to £520.7 million for 2015 (2014: £506.0 million). Combined operating ratio2 from ongoing operations of 94.0% for 2015, an improvement of 1.0 percentage point  Return on tangible equity3 of 18.5% for 2015 (2014: 16.8%). Profit before tax for continuing operations1 increased to £507.5 million (2014: £456.8 million)  Results benefited from disciplined underwriting, prior-year reserve releases from ongoing operations of £378.9 million (2014: £397.6 million) which were higher than expected, together with lower costs, partially offset by higher claims from major weather events and lower volumes  4.5% increase in final dividend per share to 9.2 pence per share and additional special dividend of 8.8 pence per share. Total dividends for 2015, including special interim dividend of 27.5 pence per share following sale of International division, of 50.1 pence per share (2014: 27.2 pence per share)
probably the best rum company in the fuse Financial highlights  Gross written premium from ongoing operations1 up 1.7% to £3,152.4 million, with 4.8% growth in Motor for 2015 and 7.1% in the fourth quarter. Motor and Home own brands in-force policies up 1.4%  Operating profit from ongoing operations increased to £520.7 million for 2015 (2014: £506.0 million). Combined operating ratio2 from ongoing operations of 94.0% for 2015, an improvement of 1.0 percentage point  Return on tangible equity3 of 18.5% for 2015 (2014: 16.8%). Profit before tax for continuing operations1 increased to £507.5 million (2014: £456.8 million)  Results benefited from disciplined underwriting, prior-year reserve releases from ongoing operations of £378.9 million (2014: £397.6 million) which were higher than expected, together with lower costs, partially offset by higher claims from major weather events and lower volumes  4.5% increase in final dividend per share to 9.2 pence per share and additional special dividend of 8.8 pence per share. Total dividends for 2015, including special interim dividend of 27.5 pence per share following sale of International division, of 50.1 pence per share (2014: 27.2 pence per share)