The full impact of the Ogden rate change has not yet been felt, according to independent wholesale insurance broker
Citynet.
While the London-based Lloyd’s broker has seen an impact in both its casualty and motor divisions from the rate revision, the looming reinsurance season at the beginning of next year means there is likely to be more change ahead.
“There is the potential for a double hit next year, because January 01 is reinsurance season,” Matthew Carlick, broking director at Citynet, told
Insurance Business.
In the casualty space, the broker has seen instances of individual claims rising significantly – sometimes by millions – on the back of Ogden, particularly in high-risk trades such as construction and haulage, according to Carlick.
Meanwhile within motor, while some rates have “clearly gone up,” others have actually gone down, according to Graeme Flynn, motor director at the firm.
“I think there’s a clear split between the types of risks that are going up, and others that are actually reducing,” he commented.
“The real impact in the motor environment is obviously on third party personal injury claims, which are more likely to happen on hire and reward risks, so people that are carrying passengers for hire and reward, or carrying goods for hire and reward – those rates are going up,” Flynn continued.
However, on own goods car and van business, rates have tended to go south: “They are actually reducing, because everybody wants that business, as the impact is less there,” Flynn said.
Again – reinsurance season could change all that. Flynn echoed Carlick’s sentiments that the ripples of the rate change are still moving.
“I believe we are yet to see the full impact, and that 2018 will be the true barometer of how much rates are going to go up on the back of this,” he said.
As for 2018, both Carlick and Flynn expect to see another rate change – though not necessarily any time soon – and as a 100% wholesaler, the business is in a good position regardless.
“I think that towards the end of 2018, there will be too much pressure on the government not to change it,” Carlick said.
Flynn added: “The reality is, it’s not a priority for the government at the moment. They have Brexit to deal with, so the Ogden rate will be dealt with when they have the time to deal with it. But it will definitely be revised, it’s a question of when they actually get around to doing it.”
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