RenRe expects $30m hit from UK Ogden rate cut
Bermuda-based RenaissanceRe Holdings (RenRe) has estimated that the pre-tax impact of the Ogden rate change on its carried reserves is approximately $30 million, and will be recognised in the first quarter of 2017.
The company said that the majority of the reserve increase relates to a limited number of UK medical malpractice contracts within its casualty and specialty segment.
RenRe also pointed out that due to the complexity of factors contributing to the change in reserve estimates, the ultimate impact to the company's reserves as a result of the change in the Ogden rate may vary from these estimates.
At the end of February the UK Ministry of Justice announced that from mid-March it was reducing the Ogden rate, which is the discount rate used to calculate lump sum awards in UK bodily injury cases.
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