RenRe Estimate Ogden Rate Change Impact
Bermuda-based RenaissanceRe Holdings Ltd. announced the estimated impact of the U.K. Ministry of Justice’s recent announcement of a decrease in the discount rate used to calculate lump sum awards in U.K. bodily injury cases, known as the Ogden rate.
Effective March 20, 2017, the Ogden rate changed from plus 2.5% to minus 0.75%, a decrease of 325 basis points.
Based upon information currently available, the Company estimates that the pre-tax impact of the rate change on its carried reserves is approximately $30 million, to be recognized in the first quarter of 2017.
The majority of the reserve increase relates to a limited number of U.K. medical malpractice contracts within the Company’s Casualty and Specialty segment.
“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,” the company said.
