LONDON May 12 The Association of British
Insurers on Friday called for a dual-rate system for calculating
lump sum payments in personal injury claims, to reflect
different investment periods, saying the current system was
An unexpected change in the rate earlier this year by the
government has pushed up the size of payments, denting the
profits of British, European and U.S. insurers operating in the
British motor insurance market.
"The current methodology used to calculate the discount rate
is fundamentally flawed as it does not reflect the reality of
how claimants invest their damages," James Dalton, director of
general insurance policy at the ABI, said in a statement.
"Retaining the status quo is not an option."
The ABI was responding to a government consultation on the
(Reporting by Carolyn Cohn; editing by Simon Jessop)