Business
Review of Ogden Discount Rate
Review of Ogden Discount Rate.
About this update from Frenkel Topping Group Plc
[{"type":"text","content":"\n \nRNS Number : 3824Y Frenkel Topping Group PLC 02 March 2017 \n\nFrenkel Topping Group plc\n(\"Frenkel Topping\" or the \"Company\")\nReview of Ogden Discount Rate\n \nFrenkel Topping (AIM: FEN), a specialist independent financial advisor and asset manager focussed on asset protection for vulnerable clients, provides the following update in relation to the announced change to the discount rate from 2.5% to -0.75% and how it affects the business.\nDiscount Rate from 2.5% to -0.75%\nOn the morning of 27 February 2017, the Lord Chancellor ruled that the Ogden discount rate which is used to calculate the damages awarded in clinical negligence and personal injury claims be set at -0.75% rather that the current 2.5%, effective from 20 March 17.\nThis announcement has dramatically changed how compensation damages are calculated. The last change to the discount rate was in 2001. \nImpact on Damages Award\nWe are revising the Assets Under Management (AUM) growth assumptions in our business as follows;\n\n\n\n\nYear\n\n\nPrevious Organic Growth Assumption\n\n\nRevised Organic Growth Assumption\n\n\n\n\n2017\n\n\n£75m\n\n\n£100m\n\n\n\n\n2018\n\n\n£100m\n\n\n£180m\n\n\n\n\n2019\n\n\n£100m\n\n\n£180m\n\n\n\n\n \nFrenkel Topping has calculated that the size of court damages is likely to grow significantly. Using pipeline cases, Frenkel Topping has calculated the following increases as examples:\n\n\n\n\n\n\n\n\n\n\nQuantum @ 2.5% discount rate\n\n\nQuantum @-0.75% discount rate\n\n\nQuantum uplift\n\n\n\n\nClaimant Age\n\n\nLife Expectation\n\n\n@ 2.5%\n\n\n@ -0.75%\n\n\n\n\n\n\n\n44\n\n\n7 year reduction\n\n\n£ 5,199,736.00\n\n\n£ 7,640,843.79\n\n\n47%\n\n\n\n\n57\n\n\nNormal\n\n\n£ 3,856,463.00\n\n\n£ 6,122,055.90\n\n\n59%\n\n\n\n\n11\n\n\nNormal\n\n\n£ 3,619,529.00\n\n\n£ 6,892,115.39\n\n\n90%\n\n\n\n\n36\n\n\nNormal\n\n\n£ 6,637,936.00\n\n\n£ 12,596,746.00\n\n\n90%\n\n\n\n\n13\n\n\n24 year reduction\n\n\n£ 9,956,514.00\n\n\n£ 18,505,359.33\n\n\n86%\n\n\n\n\n36\n\n\nNormal\n\n\n£ 1,784,602.0...