16 November 2021


Next month, the personal injury rate (PIDR), applied to lump sum compensation awards for future care and loss of earnings in Northern Ireland, will decrease - meaning payouts will increase significantly.


From 31st May 2021 the personal injury discount rate (PIDR), applied to lump sum compensation awards for future care and loss of earnings in Northern Ireland will have the ‘lowest discount rate of all UK countries’

The proposed rate of -1.75% will mean that the value of some claims in Northern Ireland could be more than double that of England and Wales.

The concern for all Northern Irish businesses is that the Department of Justice has announced an interim change to how personal injury claims are calculated with anticipation that the new rate will come into effect on 31st May 2021. There will be further changes on the basis that a further ‘stable longer term’ rate will come into effect in early 2022.

In the interim, there could be a financial impact on businesses should the limits under their Liability policies be inadequate, and higher limits need to be purchased. We are also in what is termed ‘hard market’ conditions where premiums could rise as markets consider their reserves to pay claims.

As a result of the rate change, claims settlement will increase significantly, particularly for motor and liability policies. Associated claims costs such as future loss of earnings, care, financial dependency and lost years will also increase.


An annual lifetime care claim of £100,000 for a 10 year old male in England and Wales, at a -0.25% discount rate would be valued at £8.7M; the same claim in Northern Ireland, at a discount rate of -1.75%, would be £17.7M.



With insurers unable to offset any lifetime payments by investment returns and faced with up-front pay-outs, they will need to inject further capital into their reserves, which will mean a potential increase in the premiums they have to charge.

It is therefore essential that all complex personal injury claims which are likely to be heard in Northern Ireland within the next twelve months are carefully reviewed and adequately reserved.

“With increased exposure to larger claims there is a significant need to assess existing Public and Employer insurance levels on standard policies. It’s essential that everyone in the hospitality industry examine their cover and where necessary increase cover limits. One option might be to look for excess layer insurance cover from a specialist broker like Towergate which can be placed during the life of an existing policy. The message is simple- Businesses need to act and act now!” -Colin Neill, CEO, Hospitality Ulster.

HU Insurance partner Towergate Dawson Whyte will be able to help businesses in assessing their limits of liability and with our powerful presence in the market, we will be able to source very competitive premiums where increases in limits are sought.


If you have any questions whatsoever, please remember that Towergate Dawson Whyte are local, ready and willing to provide personal and professional advice on how these Ogden rate changes may affect your business.