Aspen Insurance Holdings announced an Ogden rate change impact at $30 million pre-tax in the shape of increased carried reserves for affected lines of business.
The estimated figure for the financial impact on the firm’s 2017 first-quarter results is based on a review of its open claims from relevant segments, Aspen said.
The higher claims costs from the rate cut are expected to decrease for the firm in the future, as Aspen reported about half of the $30 million as related to business lines the firm’s already exited and which are in run-off, or related to areas Aspen has already scaled back on in recent years.
Aspen’s insurance and reinsurance segment has been impacted by the rate change through its U.K. employer’s liability and U.K. public liability business, and by U.K. motor liability reinsurance.
However, the firm’s exposure to the Ogden rate is limited, as its chosen to shift away from significant U.K. motor liability underwriting over a number of years.
One of the largest commercial lines underwriters in the U.S., W.R. Berkley Corporation, has also recently revealed figures showing the same estimated impact reporting an expected $30 million pre-tax and $22 million net blow to the firm’s first-quarter operating results after the Ogden rate change.
Re/insurers across commercial lines in the U.K. are reporting losses to 2017 first-quarter results after the U.K. Ministry of Justice announced a reduction to the Ogden rate from +2.5% to -0.75%.