Motor insurers may face a £4.9bn ($6.1bn) bill if the government goes ahead with proposed changes to the way awards are calculated for compensation claims, consultancy Willis Towers Watson has warned. Willis Towers Watson believes that adjusting the discount rate to 1% is a more feasible move, which would result in a one-off impact of £1.7 billion and about £200 million per annum increase in the cost of providing motor insurance. Describing the planned adjustment of negative 0.5% to the personal injury discount rate as a "pressure cooker waiting to blow", WTW said the cost of providing car insurance alone would increase £700m per year. The move is part of plans by ministers to cut the amount that people pay towards their car insurance, which will be capped at £1,000 in England and Wales from April next year – but not Scotland.
Motor insurers may face a £4.9bn ($6.1bn) bill if the government goes ahead with proposed changes to the way awards are calculated for compensation claims, consultancy Willis Towers Watson has warned. Describing the planned adjustment of negative 0.5% to the personal injury discount rate as a "pressure cooker waiting to blow", WTW said the cost of providing car insurance alone would increase £700m per year. The move is part of plans by ministers to cut the amount that people pay towards their car insurance, which will be capped at £1,000 in England and Wales from April next year – but not Scotland.