Reinsurers offer new solutions to PPO threat

General insurers in the UK are coming to terms with a growing number of periodical payment orders, which add unfamiliar long-term liabilities to their balance sheets. Reinsurers are offering innovative products to help. Life insurers, too, could step in to assist their general insurance peers. Louie Woodall reports

Periodical payment orders (PPOs) constitute a growing threat to UK motor and liability insurers. What started as a trickle in 2005 (when only four PPOs were settled) has over the last few years turned into a flood: 89 were settled in 2012 alone.

PPOs are large motor and/or liability claims typically paid out where the claimant suffers a life-changing injury, like brain or spinal damage. Rather than being settled as a lump sum, these claims are paid out as a stream of regular payments for the