Hastings Group Holdings plc (LON: HSTG) today notes the announcement made yesterday by the Lord Chancellor regarding the change to the discount rate applicable for personal injury damage awards (“Ogden rate”) from -0.75% to -0.25%.
As previously indicated, the Group’s insurance subsidiary has held best estimate reserves consistent with an Ogden rate in the range of 0% to 1%, in line with the range indicated by the Government previously and the rate at which large bodily injury claims have been settling. The Company can confirm that the best estimate will now be updated to reflect the change in the Ogden rate to -0.25%.
The Company expects this to result in a one-off pre-tax charge to its 2019 financial statements of £8.4m. Excluding this impact, the Company expects to report an underlying calendar year loss ratio for the six months to 30 June 2019 at the top of its 75% to 79% target range.
Hastings Group Holdings plc confirms that total reserves continue to be held above the best estimate, recognising the inherent uncertainty in claims development patterns, particularly for bodily injury.