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Saga says Ogden rate will not have 'material impact' on outlook

28 February 2017 10:44

Saga said it does not expect the Ogden rate change to have a material impact on its financial outlook.

The company updated the market on the UK Government's decision to move the Ogden Rate to -0.75% from 2.5%.

The UK Government first announced the decision to launch a consultation process on a potential downgrade to the Ogden rate in 2012.

In line with its prudent approach to reserving, Saga held a specific amount within its reserve margin in anticipation of a reduction in the Ogden rate.

Given the size of the rate change, there will be a one-off, pre-tax impact on profit of £4m on its results for the year to 31 January 2017.

Management said this will not impact its deliberations regarding the proposed final dividend recommendation and it remains well capitalised.

Saga reported its older demographic provides a defensive advantage, with lower claims frequency generating less exposure to large and small bodily injury claims, and to periodic payment orders (PPOs).

At 10:44am: (LON:SAGA) Saga share price was +2.6p at 188.6p

Story provided by StockMarketWire.com

Related Company: SAGA

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