Posts Tagged ‘insurance’
The future of the Association of British Insurers is an uncertain one after one of the main players in it – Legal & General – decided to go solo. L&G decided that it would be in the best interests of shareholders and policyholders if they cancelled their membership.
A few weeks ago, the company said that they wanted the trade body to be “a more forward-looking organisation”, so it isn’t too much of a surprise.
Nigel Wilson, Legal & General’s chief exec, said: “Our public policy work increasingly involves sharing commercial aspects of our business with government, which, for very obvious reasons, not least competition law, we cannot share with competitors.”
“We believe that, increasingly, engagement with government, regulators, quangos and other external bodies will be on a case-by-case basis going forward.”
The ABI have been having a rough time lately as it is, with the insurance industry looking at huge regulatory changes, which include reforms in the last Budget which promised structural changes to the insurance sector.
For the time being, Admiral and Allianz have no plans to ditch the ABI, and it looks like Axa will be sticking with it for the foreseeable future. Aviva and Prudential haven’t given their thoughts on the matter, but if Legal & General start making serious money and having more freedom, are we going to see the insurance equivalent of a Premier League breakaway where they can all start calling the shots more frequently?
Would that be good for consumers? It could go either way.
They’ve said that the recent fall in premiums may be ending, even though regulatory efforts have been trying to bring them down even further.
Admiral’s chief executive, Henry Engelhardt, said: “In the UK there are some signs that premiums are no longer falling but we have yet to see firm evidence of an inflection point and a return to premium growth.”
“Admiral’s premium rates have been pretty flat over the first half of the year, though as a result of the reductions in 2013, total premiums are down around 9% compared with the first half of 2013.”
You see, insuring your car has been a little cheaper since the Government and industry got together and started to come down hard on fraudulent claims (we’re looking at you Mr I Got Whiplash After Someone Took My Wing Mirror Off And I Gasped A Bit Harder Than Usual). With a decline in claims , premiums went down with them.
The Competition and Markets Authority (CMA) proposed imposing a cap on replacement vehicle costs too, which would be passed on to the at-fault driver following an accident, as well as wanted to ban price parity agreements between price comparison websites and insurers.
However, it looks like Admiral & Co have found a way of milking more money out of drivers.
The mid-nineties were dark days. Not just because of Peter Andre and East 17 but also because those were the shady times when building societies forced you to take out their own buildings insurance policies when you had a mortgage with them- at a healthily inflated premium of course.
But in the face of a sledgehammer of legislation to tackle the problem, the practice was dropped, and in today’s more enlightened times, new buyers are free to shop around, using any one of the multiple comparison sites around to secure the best deal on home insurance.
However, there is still an issue for homeowners. Last month comparethemarket.com (the one with the rodents) calculated that, for the‘significant number ‘of people, who have not switched since taking out their home insurance under sufferance through their original lender, they could have saved ‘legacy losses’ totalling around £2.2bn – an average of £1,446 per household over the last 20 years.
Additionally, the cheeky anthropomorphic creatures discovered that some building societies, mostly smaller regional ones, are still levying a penalty charge of up to £45 if you choose not to take out their overpriced insurance.s
Sounds a bit rum. Of course, the building societies can’t actually charge you for not buying their products, that would be madness. What they can do, however, is charge you an administration fee for requiring sight of your alternative insurance provider to ensure that it is, in fact, bona fide. Unlike the admin charge itself.
The comparethemarket.com research found Ipswich building society to be the worst offender in a list of 18 lenders which charge home buyers for daring to choose a cheaper insurance provider.Ipswich charges £45, but out of the other charging lenders, the largest is Skipton, which charges £25.
Simon McCulloch of comparethemarket.com said, based on the mortgage and remortgage market share of those lenders that impose a fee, consumers are collectively paying nearly £2m a year for these charges.
“These charges are essentially a tax on being financially proactive and prudent,” he said. “Shopping around for buildings and contents insurance saves a third of UK households more than £100, which could, for example, pay for your first six months broadband after you move house. But charges like these are designed to put people off doing this and, in many instances, to tie them into more expensive products.”
A spokesman for the Ipswich said: “The society has recently conducted a review of the ‘own insurance’ mortgage fee. The result of this is that we intend to remove this fee for all applications from 1 September 2014.”
A Skipton spokesman said: “There is a charge we make to ensure that if someone buys their buildings insurance elsewhere, we need to check that the property is properly insured.”
And yes, I know they are mammals.
Two out of three people are incensed about paying the sneaky charges hidden in the small print of insurance policies. It’s becoming a thing now to insert charges for cancellations or amendments to your policy and consumers are NOT happy.
A Which!!! survey revealed that nearly half of insurance firms have increased admin fees in the last few years – fees that have no real basis in reality, like a £20 charge to set up a policy or get copies of documents.
So why all the secret fees and subterfuge? Well, it’s those goddamn comparison websites, innit?
Insurance companies want to keep those all important headline fees down, so they have to spread the actual cost somewhere else. It’s also happening with mortgages, credit cards and bank accounts. In fact, it’s like the whole world is turning into Ryanair.
And we’re getting wise to it, too. 68% of those surveyed said they were aware of the manipulative trickery that companies employ to keep headline costs down.
Hit it, Ricardo Lloyd-o! “Consumers are fed up with being hit with unexpected, additional costs for financial products that lead to them paying more than they bargained for. These fees can be hard to avoid, and people often don’t know what they’re really paying for.”
“We want the financial services industry to stop sneaky fees and charges, and put an end to excessive, unclear and hard to compare fees that do nothing to improve the low level of trust in these markets.”
The main problem is with the headings. The FCA says that too much focus is put on the big splashy headline price and the brand itself, and not enough info is given about what you actually get for your money. If you’re looking for home insurance, for example, you don’t necessarily get a full outline of your cover or any indication of whether it’s right for you.
The FCA eyeballed 14 price comparison sites and found that the websites don’t make it clear that they just gather and show all the prices – and don’t necessarily tailor their suggestions to your specific needs.
However, some are very naughty indeed and break FCA rules because they don’t declare potential conflicts of interest – ie, some sites are owned by the very insurance companies they’re trying to
pimp ‘impartially’ suggest.
Clive Adamson from the FCA said: ‘Our research found that price comparison websites are not meeting our requirements in delivering fair and consistent outcomes for consumers. We also found that consumers had a number of misconceptions about the services they provided. It is important for consumers to understand that not all products are the same and the cheapest product may not always be the best for their needs.’
Companies like gocompare.com have said they would look carefully at the report’s findings, just as soon as the corrupt Go Compare man comes back from taking crack at the meerkat brothel.
We’d all like an extra 20% discount on our car insurance, right? Well it seems that some insurers are offering up to a fifth off car insurance premiums for ‘prudent’ people.
Some insurance firms claim that they have found a strong link between people who are prudent with their spending and those less likely to take risks while driving. If you’re careful with your money, you’ll be careful on the road. This means that Lloyds insurance arm Scottish Widows is apparently offering up to 20% off to certain customers who, for example, stay within their overdraft limits, or never need an overdraft, or who never miss a credit card payment.
Of course, this doesn’t mean that renewing car insurance becomes a more labour-intensive process, requiring drivers to detail their financial histories in order to try and get a discount. Instead, this is just part of the ‘big data revolution’ which sees businesses using consumers’ personal information in new and exciting ways. And Scottish Widows aren’t alone.
We’ve known for years that Tesco monitors the shopping habits of Clubcard holders, and Tesco insurance reportedly offers discounts of up to 40% on home and car insurance to those whose shopping habits indicate they would be a careful driver. However, they are not forthcoming on which products are so indicative. Aviva changes house insurance premiums depending on the exact location of properties on a street.
But while no one is going to be miffed at being offered an un-requested 20% discount, as with everything else in life, the fear is that this is, in fact, a double edged sword. While those with ‘good’ financial habits are offered money off, are those struggling to make ends meet going to be penalised even further by higher premiums? Apparently not.
A spokesman for Scottish Widows told the Telegraph that “this use of the data we hold is allowing us to offer discounts on motor insurance to customers who tend to show care in areas like personal finances. But we will not be using this information to increase premiums.” Sounds pretty categoric. For now anyway.
However, privacy groups remain unconvinced, and consider this alternate use of data to be a breach of trust by holders of super-sensitive data.
Emma Carr, acting director of Big Brother Watch, said: “Despite this being within the law, the way many companies go about doing this is underhand and goes far beyond what customers would expect them to do with their data.” She called on insurers to give customers the option of explicitly opting-in to the use of big data rather than just allowing them to opt out, if consumers are even aware of how businesses are using their data.
So what do you think? Is it OK so long as it only confers positive benefits, or will the sharp side of the deal inevitably turn up before long?
From taking bulbs out of tail lights so that people crash into you, to simply railroading pregnant women in cars on purpose: there’s a myriad of choices for the petty criminal about town.
And now the Association of British Insurers (ABI) is saying that detected insurance fraud reached record heights in 2013 an 18% increase on the previous year. £1.3bn was paid out in dodgy claims involving fake car crashes and car insurance scams last year.
Crash for cash scams are rife all around the country, and that causes everyone’s wallets to suffer from whiplash, too. It’s been estimated that fraudsters are costing households £50 extra a year on their insurance premiums.
As well as professional crash for cash scammers, fake car insurance claims rose by 34%, with people claiming they had injuries and later being filmed playing golf and dancing the pasa doble.
But although attempted fraud has gone up, the ABI added that overall the number of successful fraudulent cases has gone down, thanks to better reporting and investigation.
Malcolm Tarling of the ABI said: ‘The number of detected frauds is rising; that’s because we are getting better at detecting staged accidents. We are going to continue to tackle fraud – that’s what our honest customers expect us to do.’
Hmmm. So if actual fraudulent claims are down, why are our premiums still up?
Insuring your vehicle is a dear-do, and the competition in car insurance is hotter than ever. With that, Admiral (who also own Confused.com) have noticed that their sales are falling across the group.
There’s been a 6% increase in customers, but a 7% fall in sales, so to keep some customers, and maybe win some more, Admiral have decided to reduce premiums by 11%.
Chief executive Henry Engelhardt said: “The UK car insurance market remains competitive and consumers continue to benefit.”
“We continue to focus on customer service and retention and as a result we were pleased to grow customer numbers by 2 per cent in the quarter. Growth outside the UK remains strong and we are happy with the progress we are making.”
It’s a good time to switch if you’re unhappy with your current package.
A recent report showed that, across the whole sector, premiums in the UK car insurance market fell by 19% in the first 3 months of 2014 compared with last year. Shop around and, if you’re going to use a price comparison website, use more than one because some are owned by parent companies who make sure cheaper rivals don’t appear in their results, ahem.
With fraudulent car insurance claims on the up, Swiftcover have become the first insurer to offer reduced premiums to people with dashboard cameras – so they can obtain concrete evidence and settle claims quicker.
They reckon it’ll save you £33 a year, but of course, you’ll have to buy the dashcam if you don’t already have one, which will cost you about £25.95. So it’s not actually worth it. But it IS making THEIR life easier!
Roman Bryl from Swiftcover.com said: ‘We believe that by using a dashcam and being able to accurately and quickly establish who was at fault, we will save money and therefore motorists will significantly benefit from lower premiums and more responsible driving.’
So, er, YOU’RE not going to save money. Well, perhaps a little under a fiver a year. But it would make them happy and save them money. Hmmm. Something tells me they’ve not really thought this brilliant offer through. If it’s so important to have visual evidence of liability when you claim, why don’t they just give you a free one when you join?
But, if you’re really hellbent on that 10% discount, perhaps you could make some of your money back by using your dashcam to make dogging films. Or, if you’re super amazing musician Kim Deal, you could use it to make an awesome lo-fi music video, like this one.
(Just a thought.)
Successful home insurance claims aren’t just about humdrum leaky pipes or articulated lorries crashing into the front of your house. At the RIAS, amongst the 400,000 insurance claims they receive a year, there’s a regular stream of wild and wacky incidents involving babies vomiting on laptops, badgers chewing through masonry and squirrels breaking windows.
In their top ten of strange claims, a snail ate £78 worth of carpet at a man’s house in Preston, a pigeon fell down a chimney and destroyed the carpet, ornaments and sofa, causing £8000 worth of damage, and a woman locked a badger in her shed, which then ate through her wall. There was also the deer who fell into a swimming pool.
But the piece de resistance has to be the dog from Galashiels, who saw another dog on the telly and TRIED TO JUMP THROUGH THE SCREEN.
With the weary air of someone who has seen it all before, Peter Corfield, managing director of the RIAS said:
‘Sometimes it’s the most unlikely events that can end up causing real damage. Not all claims are straightforward and sometimes we do see some bizarre scenarios. But, saying that, babies and animals are often the culprits.’
It seems even the legal system is getting tired of spurious whiplash claims these days. We’ve all been paying through the nose for those poor unfortunate people whose entire soft-necked families happened to be in a car that received a rear-end shunt, but now it’s all become too much even for a High Court judge.
Hearing the case of two women making a personal injury claim against the Home Office after a vehicle incident, Mr Justice Mostyn dismissed the claims as inaccurate and evasive, saying they were based on “an improper pecuniary motive.” Or, in other words, that they were thieving liars. Allegedly.
The court heard it took 18 days for one of the claimants to complain to her GP about any pain, and the other waited a week before she went to her doctor to report any injury as a result of the impact. Both women were, however, assessed by a medical ‘expert’ despite there being no visible damage to the car after the accident and the fact that neither woman reported any injury at the time or asked for time off work. Two other people in the car at the time of it hitting a bollard at slow speed, the driver and front seat passenger, miraculously escaped completely unharmed.
The judge took particular offence at the medical ‘evidence’ as it was so similar it “cast doubt on the professional objectivity of the expert.” In perfectly identical terms, medical reports said both had suffered “nervous shock and psychological trauma” and endured “recurrent obtrusive memories of the accident and obsessional thoughts as to how she might have been seriously injured” by a rogue bollard, prowling the streets looking for innocent victims.
Justice Mostyn did not mince his words:
“It is proper that I should go on to record that I do not accept the evidence of either of them, which I find to be inaccurate, evasive, partial and advanced for an improper pecuniary motive,” said the judge. ”This is yet a further example of the national phenomenon of false whiplash claims being made and it is in an attempt to stem the tide that I do not shrink from making firm adverse findings against them”.
He added: “Obviously it is, in terms of probability, almost inconceivable that each of these women would have suffered physically or mentally in precisely the same way.”
Of course, anyone who has genuinely suffered from whiplash as a result of a car accident will know how genuinely painful it is, and no-one, not even Justice Mostyn, is saying those genuinely injured shouldn’t be able to make a claim. However, first-hand experience of such ‘medical experts’ does back up the judge’s opinion, particularly where medical reports contain evidence that cannot possibly have been collected during the 3 minute examination- reports that are, as a matter of course, not challenged by insurers where whiplash is the main stated injury.
But until someone can come up with a pregnancy-test style wee-on-a-stick test for genuine whiplash, we are left relying on judges to make sensible outcomes from stupid claims in the forlorn hope that it will deter fraudulent claimants from wasting everyone’s time and money.
Fife, on the East coast of Scotland, is not only a hotspot for Buckfast drinking, Edith Bowman and the Proclaimers, but it’s also now the place that sees the most complaints about disruptive neighbours in the UK.
That’s according to Churchill Home Insurance, which raided documents under the Freedom of Information act and found that 53 out of 1000 people in Fife had officially complained to councils about neighbours playing loud music and generally being anti-social nutjobs. That amounts to 19,070 ear shattering, dog barking complaints.
Second was Newcastle upon Tyne, with 45 statutory complaints per 1000 people, and third was the peaceful London borough of Westminster, which numbered 40 complaints for every thousand people.
Martin Scott from Churchill said: ‘These findings present a worrying picture of the effects other people and properties near our homes have on our lives.It’s a reminder to all of us to consider that our parties, pets and general property maintenance may be causing our neighbours undue amounts of stress.’
(What he really means is: ‘don’t be a dick and KEEP IT DOWN.’)
But if you don’t want to hear the bassline of ‘Blurred Lines’ thumping through your central heating pipes at dawn, then there is a solution. You could move to the Isles of Scilly, which only generated ONE complaint in the first 9 months of 2013. And that was probably about a slightly bushy leylandii.
The FCA are going to tell insurers that add-ons for things like mobiles, holidays and home emergencies aren’t currently competitive, so therefore, not at all working in the best interest of consumers.
This means that the regulator is all set to announce new rules after they investigated competition rules around insurance companies. For us, as well as cheaper offers (you’d hope), this means these add-ons will now be explicitly explained to us and up-front, rather than tucked away behind vagueness.
These new rules may seem like small fry, but if you consider that some motor insurers generate around a third of their profits from add-ons, this will change the way they do business for fear of big fines. Of course, last year, Swinton was fined by the FCA to the tune of £7.4m fine, with a further £11m paid out to customers who had been mis-sold add-ons.
Unveiling the initial review, the FCA said: “People are being made to feel they have to have these products when they don’t really need them. Our concern is that the products are generally poor value, and, by and large, people don’t pay too much attention to the terms and conditions. We are saying there could be anti-competitive behaviour.”
Some have already set-up special funds to cope with emergencies and others are offering you repayment holidays while you get yourself sorted. Most banks are offering a three month repayment holiday for mortgage borrowers.
Other than that, who is offering what?
HSBC are offering increased financial flexibility to customers. That means fast-tracked credit acceptance, loan and overdraft extensions and waiving fees on loans and overdrafts. They’re also going to get rid of limits on emergency payments.
HSBC are also working with mapping technologies while they try and identify which properties and areas are at the worst risk of flooding so they can make contact first.
RBS and NatWest are sending specialist business support teams to flooded areas this week and next, in a bid to help small and medium-sized business with short-term money problems as they priorities repair work and such, and of course, try and cope with their loss of income.
RBS/NatWest set up a £250 million UK Storm Business Fund which can provide short-term, interest-free financing and is available to all businesses, not just customers of RBS and NatWest. You can get three-months interest free and fee-free loans.
Ulster Bank have set up a support package of £10 million to help businesses that have been hit by the weather. The bank will help out customers with short-term cash commitments, such as repairs or managing a working capital. As Ulster Bank are part of the RBS Group, it’d be worth asking if they have the same provisions as RBS and NatWest also.
Nationwide current account customers will be able to ask for a temporary overdraft or an increase to cover emergencies brought on by the averse weather. The building society said: “We realise that not all customers may have the relevant documentation to hand and so, in such cases, we will find alternative ways to securely identify and assist our members.”
Santander are offering a loan payment holiday or giving you the opportunity to change your mortgage to an interest-only one, so you can reduce your monthly cost. Credit facilities will be extended for 12 months for farmers (6 months for small businesses). They are also paying £100,000 into a recovery fund.
The Association of British Insurers
The ABI have issued an emergency guide for households so they can be better prepared when dealing with insurance companies. You can read that here.
Ministers are saying that all driving records are being moved online, which should mean that the cost of your car insurance should fall. The days of keeping the paper bit of your insurance with your licence is soon to be over (mid 2015, they predict).
Premiums should fall because insurers will now be able to check you for traffic offences, which means, if you’ve been a good driver, you’ll get a cheaper deal as the insurance companies won’t have to make guesses about the risk of motorists.
Now, all your speeding points and the like, will be available online. If you’ve been a lousy driver, this is not great news. This might not be great news for anyone if you consider the government’s record of IT cock-ups.
The Association of British Insurers says there should be ”significant cost savings” resulting from “reducing the need to obtain paper copies of licences from policyholders” and the DVLA will allow insurers to access information through the gov.uk website using an individual’s licence number, national insurance number and postcode.
This comes after the news that paper tax discs will be scrapped and that the paper counterpart to the driving licence photo card is to be killed off too.
The DVLA said that “although some services cannot be delivered digitally, such as assessing a customer’s fitness to drive, we can improve the processes supporting the delivery of these services through making greater use of digital tools”.
Are you happy for all your details to be on a government website in exchange for cheaper insurance, or is this an accident waiting to happen?