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PPOs

The GIRO PPO working party has run annually since 2009, its work being to investigate Periodical Payment Orders (PPOs) and their effects on the UK insurance and reinsurance industry.

Objectives:-

 

PPOs are a significant feature of insurers' and reinsurers' balance sheets already, and are having an impact on pricing and capital modelling efforts of GI actuaries.  We have been at the forefront of advising GI actuaries about the impacts on their work, such as the need to use life insurance techniques in reserving.

 

We have also run an annual survey of the UK motor insurance industry about their experience of PPOs.  This has enabled two things.  First, we have been able to create and publish statistics about number, quantum and nature of PPOs as awarded by the courts. Secondly, we have asked for qualitative feedback from the industry about their concerns and practices as regards to PPOs.

 

The working party will be compiling a mortality table of impaired lives due to brain and spinal injury following a severe trauma. The data is compiled from the UK medical research database of patient records as entered by GPs. Whilst cause of injury is not recorded, we hope that the data will be sufficiently close to motor-related accidents that the mortality is a good match. To the best of our knowledge, this is the first time that such an investigation has been attempted. There is considerable call in the insurance industry for such analysis to help pricing, reserving and capital modelling.

Outputs:-

 

Membership:-

 

Chair: Anthony Wright

 

Current number of members: 14

 

If you would like to join this working party, or for further information on any of our general insurance working parties please email Dawn McIntosh, Communities Manager.