The Lord Chancellor has announced that the Personal Injury Discount Rate in England and Wales will change to +0.5% on 11th January 2025, matching the rate change already applied in Northern Ireland and Scotland.

While the new PIDR of +0.5% will mean that personal injury claimants will receive less compensation, premiums for liability insurance are expected to fall. Jon Dye, director of underwriting for motor at QBE Insurance, said: “We welcome the PIDR review and the move to align the rate with more recent economic conditions and the rates recently announced by Scotland and Northern Ireland.

“Whilst this rate is still likely to result in some claimants being over compensated, this movement is positive news for consumers and business and will help negate the continued upward pressure on the cost of serious bodily injury claims, including increasing care cost at around +9-12%.”

Jonathan Edwards, partner and head of insurance and risk at HCR Law, added: “The new PIDR is very good news for insurers, as it will hopefully begin to mitigate significant claims inflation over recent years, fuelled by the ever-increasing cost of living, potentially freeing up funds for insurers to utilise elsewhere.

“This puts England and Wales on par with Scotland and Ireland, having revised their rates earlier this year. Insurers will be reviewing outstanding settlement offers and reserves in advance of the new rate coming into force on 11th January 2025.”

Prior to the latest announcement, two-thirds of respondents to a recent Airmic members’ poll said they believed that the PIDR for England and Wales should be brought into line with that for Scotland and Northern Ireland. Julia Graham, Airmic CEO, said that the +0.5% rate “strikes a balance between ensuring fair compensation for claimants to meet their current and future needs, and keeping premiums for liability insurance reasonable”.

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