The insurer has withdrawn its £20m capacity from MGA Hawkwell Underwriting following the discount rate cut
Gibraltar insurer Casualty and General Insurance Company Europe has withdrawn from the UK motor market following the cut in the personal injury discount rate to -0.75%.
The insurer had been writing motor business since 2014.
As a result of the change in the discount rate the insurer has withdrawn its £20m capacity from managing general agency Hawkwell Underwriting.
A statement today from CGICE said: “The board of casualty and Insurance Company Europe Limited (CGICE) announces that as a result of the recent decision by the Ministry of Justice to move the discount rate from 2.5% to -0.75%, it has taken the decision to cease writing motor business with immediate effect.
“CGICE will maintain its services for existing policy holders for the duration of current policies.”
CGICE chief executive Danny Gibson added: “The recent decision by the Ministry of Justice to change the discount rate has made the motor business we write unviable and as a result we have decided to deploy our capital on our other classes of business.
“CGICE will of course maintain its service for existing policy holders for the duration of current policies.”
The insurer continues to write insurance for surety and bonds market.
The discount rate change has sparked fears that insurers could reduce their appetite or pull out from certain markets. It is also expected to trigger an increase in reinsurance premiums.