 | Direct line and the magic £50 million |
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| Posted By : Bill On 02/08/2017 08:45:00 | |
| I know I've been going on about the insurance industry’s conduct since the discount rate was reduced, but it seems to me to get worse. The papers reported today that profits have soared at Direct Line, “after the impact of this year’s discount rate change on personal injury compensation payments turned out to be less severe than feared … and after personal injury claims costs also continued to ‘trend more favourably’ than expected”., the company said in interim results published today. They said in March that the reduction to the discount rate would wipe £215m-£230m off their pre-tax profits, and that premiums for young drivers could rise by up to £1,000 a year, and cost the NHS an extra £1 billion a year in compensation bills. In fact, they posted a 14% rise in first-half pre-tax profits to £341million, “aided by the release of nearly £50m of reserves previously set aside for the discount rate change”. I don’t remember them revealing back in March that had a £50 million reserve in advance of the discount rate announcement – perhaps I just missed it! | |
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