Question to the Ministry of Justice:

To ask the Secretary of State for Justice, what the cost to (a) the public purse and (b) insurance companies was of the Ogden rate change of March 2017.

The personal injury discount rate set by the Lord Chancellor for England and Wales under section 1 of the Damages Act 1996 was reduced from 2.5% to minus 0.75% on 20 March following a review.

The impact on the public sector of the change to the rate in March is estimated at £1.2bn per annum.

The Government has not made an estimate of the overall impact on the insurance industry. However, the Office for Budget Responsibility’s economic and fiscal outlook in March 2017 indicated that the Prudential Regulation Authority estimated as at 27 February 2017 (the date of the Lord Chancellor’s announcement of the forthcoming change to the rate) that the cost to insurers would be around £2 billion a year, albeit with a wide range of uncertainty around that figure.