Thank God for Bank holidays!
Apart from no nasty letters through the door, getting down to my beach and not having to go to work in the City are a small retreat from the hectic world of UK Insurance. Last week was no exception with the attempted takeover of the AVIVA General Insurance Division by the much smaller RSA (those of More >han Fame) for a paltry £5 billion!
According to the UK Insurance News this week the rationale behind this move was that there is a general feeling amongst the Insurance Illuminati that Composite Insurance companies are a thing of the past and Insurance companies should be broken up into specialist areas.
In politics they call this decentralisation. In IT it’s called distributed processing.
Whenever we get a Government in the UK that swings to the right you will get calls for decentralised power and this time it appears the doom mongerers are spreading their ill informed zeitgeist amongst the Insurance movers and shakers!
Fortunately the predominantly life insurance company AVIVA managed to laugh this takeover attempt off this time!
But those who work for AVIVA should well remember that their company only came into being after a much smaller fish Norwich Union managed to lynch control from the much larger CGU (Commercial Union & General Accident)!
Insurance blogger did have one good day last week! The young lads in the office thought it would be funny if an old codger like me got given the latest assignment - an article on Mobile Phone Insurance! More specifically to report on how easy it is to buy Car Insurance on the Internet….On a mobile phone!!
Ha Ha! They knew I don’t even own one! Still I got the last laugh because I went on-line and managed to get the new Nokia 6700 Silver Slide – the 3G social networking one that’s been on the telly a lot recently- for FREE from Vodafone. So I’m now the envy of all the techno geeks in our office! Ha Ha!
As for buying car insurance on your mobile phone……I don’t want to spoil the report which goes out soon, but I’ll tell you this………It’s very easy when you type the numbers in and speak to someone!
Oh yeah Lads! I uploaded this story from this beach on my FREE Nokia Phone !
Boat Insurance in the UK
With warm temperatures right here in UK, water season is luring the boat enthusiasts. If you are on your boat every day or whether on weekends, you must have boat insurance at least during summer months, and beyond if possible. With this in mind Insurance Blog thought we’d take a look at the oldest type of insurance….
What is boat insurance?
Boat insurance is a custom made insurance that covers your boat and this coverage becomes applicable once you have the boat insurance policy from your preferred insurance company. You need to pay certain premium and while the policy lasts, the insurance company will cover all the expenditure that has occurred due to damages resulting from mishaps, accidents or calamities. This insurance also covers damage done by your boat to other boats or people.
Things to consider when buying boat insurance
Different companies provide a variety of policy wording and you may be confused what sort of policy you require. The cover offered by an insurance company and the service provided by it can differ greatly. Hence remember that if you buy a cheap policy, you may end up spending more money in the long run, if you make a claim. The most important points to consider before you buy insurance for your boat are:
• Third party liability: You must always go for liability insurance as this covers you in case you have caused damage to another boat or have caused injury to a person.
• Comprehensive cover: This insurance covers you for any accidental damage, theft, fire and vandalism.
• Theft cover: When your boat is not in use, this policy covers you against theft.
However, each insurance company has different requirements and you have to adhere to them or you may be left uninsured.
• Towing: Most policies cover expenses which cover towing waterskiers, kneeboards or inflatable toys, though restrictions may apply.
• Policy excess: This is the amount you have to pay if any claim is made.
Tips to save money on your boat insurance
Another way of reducing the cost of boat insurance policy is going for voluntary insurance excess. But remember that in an event of a claim you will have to pay the excess. So ensure that you are able to strike a balance between cost of the insurance and the excess you choose when trying to reduce your boat insurance premium in the UK.
Once summer months are over and the boat is laid up, it would be foolish cancelling your insurance, but consider laid up cover to protect the safety of your boat. Shop around for a Boat Insurance Quote!
It looks like the furry animal and the fat opera singer may have a bit of competition on the TV screens this summer with the launch across the UK networks of the latest Car Insurance TV ad in the media war of the car insurance price comparison websites.
Featuring a spinning attractive buxom lass on fire, the ad has already received large plaudits from the industry agencies who are running around trying to match the inventiveness of the TV channels production team.
So if you haven’t seen her enough on TV already …. here she is again for the benefit of everyone working at Insurance Blog.
CPI annual inflation stands at 3.1 per cent, down from 3.2 per cent in June, reveals the latest Consumer Price Index showing that the market will self adjust to inflationary pressures without the intervention of monetary or fiscal policies designed to rock the boat!
The CPI fell by 0.2 per cent between June and July this year compared with no change over the same period a year ago. These 1-month changes are both within the normal range for a June to July period; since 1996, the monthly movement between these two months has varied between a fall of 0.8 per cent and an increase of 0.1 per cent.
Some myopic Internet financial analysts who have been arguing for a base rate increase for over a year are still crying foul……
“Inflation is a stealthy enemy for savers and when rates are low, it quietly erodes the spending power of a hard earned nest egg. Savers may have had a short respite from a marginal fall in inflation, but savings rates have hit a plateau and may be there for a while.
“The average one year fixed bond rate has fallen from 3.07% in January to only 2.54% today and the average five year fixed bond rate has fallen from 4.56% to 4.08% for the same period.
“The average instant access savings rate is still at rock bottom at a rate of only 0.74%. The only trigger for any improvement in savings rates may be a surprise increase in the Base rate by the Bank of England, but this is most likely not to happen soon.”
Stated a recent industry commentator, who Insurance Blog thinks is living in cloud cuckoo land and who obviously has been sitting on his dwindling nest egg of savings, and foolishly thinks he will survive a double dip recession caused by an increase in Interest Rates!
However the Bank of England sensibly have other ideas, and quite rightly given the downward curve of inflationary pressures have decided to leave things as they are!
The Bank of England’s Monetary Policy Committee voted two weeks ago to maintain the official Bank Rate paid on commercial bank reserves at 0.5% and their decision now looks justified with inflation self balancing. The recent inflation has been artificial with rises in the RPI in areas such as fuel and power and food, although where there are alternative suppliers the markets have had to adjust to the temptation of putting prices up to pay for their past mistakes, and the UK Insurance Market is a typical example of this.
The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The Committee’s latest inflation and output projections will appear in the Inflation Report to published on Wednesday 11 August.
The minutes of the Bank’s meeting will be published at 9.30am tomorrow on Wednesday 18 August.
Asbestos Compensation Claims Are an Insurance Industry Time Bomb just waiting to go off – If the current law is successfully challenged!
The use of asbestos was banned over thirty years ago, but the UK Insurance Industry now faces a time bomb of claims from people directly or indirectly exposed to the deadly substance.
Asbestos was once hailed as a miracle product but its use has exacted a terrible price for those exposed to it. Diseases caused by ingestion into the lungs such as Asbestosis and Mesothelioma may take over forty years to become apparent, and the true cost of the substance use in damages claims, is only just beginning to occur.
Asbestos has been used by man since ancient Greece for its fire resistant properties, but even then it was recorded that slaves exposed to it were dying from terrible lung disease and breathing difficulties.
In the twentieth century Asbestos was used in all sorts of construction and manufacturing processes. In every public building you would find pipes and boilers covered with the material. Shipbuilders and dockyards were particularly prevalent in its use and it was not uncommon to regularly see old ‘laggers’ and pipe workers coughing up the so called ‘Dockers oysters’. Offices were also exposed to asbestos with the use in partition walls and suspended ceilings. In the home it was used in all sorts of ways ranging from ironing boards to car brake pads and shed roof coverings.
By far the most deadly variety of asbestos is ‘blue asbestos’ of which a single strand in the lungs can cause the deadly disease years later.
The first asbestos related industrial injury claims appeared in the 1960’s and have risen dramatically since then. The use of the material in the UK was stopped by the H&SE (Health and Safety Executive) in the 1970’s but it was only finally banned in 1980. During that time many asbestos removal firms sprung up primarily to remove the substance from public buildings such as hospitals and schools. By 2003 it is estimated that the number of direct asbestosis claims accounted for a payout of over 1.3 billion pounds in the UK.
There are four recognised types of asbestosis related disease ranging from the savage lung cancer mesothelioma which usually kills within a year, through to what are known as ‘pleural plaques’ for which legislation in the UK does not currently allow claims, though this is set to change and could trigger billions of pounds worth of claims.
Pleural plaques are areas of scar tissue on the lungs caused by exposure to asbestos.
Although not directly covered for claims as the cause and outcomes cannot be proven, UK Insurance companies used to pay out small amounts to compensate for the anxiety of the possibility of the plaques developing into something more serious such as mesothelioma. In 2007 the House of Lords ruled that these conditions are no longer entitled to compensation, though this is currently being challenged by the Scottish Courts and others and is expected to be overturned.
The United States is about twenty years ahead of the UK in asbestos related claims with more than three quarters of a million claims being paid out since 1980. The vast majority of these claims were for pleural plaques and the cost so far is estimated to be around $120 billion, which has been paid out by US and foreign underwriters.
In the UK it is not as easy to bring a claim for asbestosis as it is in America where class actions against the manufacturers of asbestos can sue a multitude of companies who each pay a small amount of damages. In the UK even though more people are expected to die from exposure, causality and proximate cause need to be proved before any legal action can be taken.
The worrying thing for Insurance company claims departments is that the range and spread of claims for asbestosis has changed dramatically in recent years as the true cost is exposed. In the past the majority of claims were from laggers and those directly involved in the use of asbestos, mostly in the industrial parts of the country.
Claims are now being made from all over the UK from for example, carpenters, plumbers, teachers and family members of those who worked with asbestos, such as wives washing clothes and children who greeted their fathers after work.
According to the health and safety executive, the body in charge of workplace safety in the UK, there is still over half a million tonnes of deadly blue and brown asbestos and nearly 3 million tonnes of white asbestos in buildings around the UK. Each year over 2500 people die from mesothelioma.
Although claims for mesothelioma are expected to peak by 2012 as those directly exposed to it will all be dead, the ticking time bomb for all asbestos claims is predicted to continue until 2040. By this time over 200000 claims will have been made which will cost the UK Insurance industry in the region of 10 billion pounds, which the Insurance companies will have to set aside in claims reserves.
If you are suffering from an asbestos related illness visit Simpsons Solicitors who are the UK’s leading lawyers for Industrial Disease Compensation and experts in maximising damages for all work injury and work accident claims.
An Explanation of Lloyd’s Slips and how they are used to place Insurance Risks on the London Market
By Dave Healey
Lloyd’s slips were originally pieces of paper containing all the details of a risk to be placed on the Lloyd’s of London insurance market, although today these are accepted electronically. Lloyd’s slips are documents in a standard format which are intended to assist not only the underwriter giving consideration to the risks presented to them but also the policy drafter and those responsible for checking and accounting for the premium. The slip has to be correctly compiled or it will be rejected.
The slip provides a precis of the risk, but an insurance broker passing the slip on a clients behalf needs to be well briefed with additional facts figures and to have available all relevant material such as survey reports, maps, plans, detailed claim records and any other documents or information which may have a bearing on the risk. The insurance broker when preparing the slip, is required to assemble a balanced and accurate representation of the risk and should anticipate as far as possible questions which are likely to arise and disclose this on the slip. If, however, a question is asked to which the broker does not know the answer, it is his duty to say so and refer back for further information. The need to disclose every material fact must always be borne in mind when completing a Lloyds slip.
Where it is necessary that a risk be spread among a number of syndicates, for a rate to be agreed that is likely to prove acceptable to other subscribing underwriters the lead underwriter, or ‘leader’, must have the confidence of other underwriters. To know which leader to approach first is an important part of the Lloyd’s insurance brokers expertise, though it does not follow that the first underwriter approached will necessarily lead the slip. If high amounts are required to be insured, and a large number of syndicates have to be involved, there is less opportunity for competition. For smaller risks the broker may find a keener rate or better terms by shopping around. The lead underwriter is not necessarily the one who can write the biggest line, though normally he will write a substantial line.
A good insurance broker needs to be a good negotiator. Tenacity is required but not to such a point as will prevent conclusion of the business. The aim is to bring the discussion to such a successful conclusion that both the underwriter and the broker together with his client are reasonably satisfied that the best possible arrangements have been made. There are times when a Lloyd’s broker needs to obtain almost unfairly competitive terms. A co-operative underwriter may provide these, so long as there is a bulk of business which has been concluded at sensible rates.
After obtaining a lead (which may be for only a small percentage), the broker needs to complete the placement. It may be that the risk can be placed using only Lloyd’s underwriters for which a slip will suffice, but sometimes the size of the exposure may necessitate the use of insurance companies in London or even overseas.
A binding authority or a ‘cover’ provides the cover holder with authority to accept risks within the limits and terms set out on the slip. The broking operation here is to negotiate the binding authority, the limits and the terms agreed. No reference is required to the underwriters once the arrangement has been set up though the binding authority will need to be renewed annually.
Line slips, on the other hand, do not give full authority to the cover holder. If a risk is to be placed under a line slip, it is normal that the two or three lead underwriters have to be seen, and they have to accept the risk and its terms and conditions. The remaining underwriters, however, abide by their agreement under the line slip for their stated proportion.
Once an underwriter has signed the slip as accepting the risk from a given date, then the insurance is effective from that date. As soon as the placement is completed, the client will be advised and the slip and its document will go through the policy issuing and accounting process.
The Lloyd’s broker who has placed the risk may sometimes be required to negotiate with the underwriter regarding a claim. However, except for the very smallest broking companies, it is more usual for a special claims broker to be appointed whose sole responsibility is to deal with these items. If loss adjusters or other assessing and negotiating parties are employed by the underwriter, then it may be the broker’s duty to negotiate with them as well. In the event of a claim the slip will be very carefully scrutinized.
In the recent past slips would have to be sent to the Lloyd’s underwriting room itself, but today this would be totally impractical for Lloyd’s to transact insurance business in this manner. Many car insurance syndicates at Lloyd’s have overcome this problem by allowing insurance broker firms to pass slips directly to them. Some of these motor syndicates have actually set up offices in towns around the country and the local motor insurance brokers deal direct with these offices, passing the slips to them to complete the deal. This method now enables Lloyd’s syndicates to easily compete with the large insurance companies on a national scale.
Dave Healey is a specialist car insurance underwriter who has been underwriting motor risks and accepting classic car insurance slips at Lloyd’s for over twenty years.
Quotezone car insurance comparison website wins praise in UK public poll
| Fledgling UK Car Insurance comparison company Quotezone has beaten it’s larger rivals in a poll conducted for UK Car Insurance Television |
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Aug 12, 2010 – The car insurance television review panel, which is widely regarded amongst industry peers as the toughest and perhaps more truthful of the on-line car insurance review websites, has unusually come out strongly in favour of two aggregator websites which compare car insurance quotes in separate independent reviews released this week.
The review team praised the small independent car insurance comparison website Quotezone.co.uk and the ubiquitous Moneysupermarket.com , however the praise was for differing reasons.
Moneysupermarket received the thumbs up from the public for it’s speed and overall ease of use and one stop shop facilities.
Smaller rival of the car insurance supermarket giant, Quotezone.co.uk received great praise for the prices of the premiums returned and the value for money of the deals and as such may well help the fledgling website’s cause in vying for the lucrative Insurance Times and Insurance Industry media award of car insurance comparison website of the year.
Quotezone are a relatively new entrant to the scene who will be making a big splash later this month with the launch of their first Car Insurance television advert across UK TVscreens.
Quotezone are unique in the market in that like the aggregators they return quotes from all the mainstream car insurance companies, however the majority of the quotes offered come direct from car insurance brokers. These brokers are able to price match or offer better deals and better cover than the system limited larger car insurance price comparison websites.
Keep a look out for this comparison system when you are shopping online for car insurance this year!
A look at Lloyd’s Insurance Market
Lloyd’s Insurance Market originated in a coffee house belonging to a certain Edward Lloyd in 1688, which was the haunt of those concerned with maritime trade.
For many years business transacted at Lloyd’s was confined to marine insurance.
In the nineteenth century, however, a large non-marine business began to be built up, particularly business from overseas, and Lloyd’s is now a major international market in this field as well as being famous as a provider of specialist car insurance.
This organisation is unique in the world. The Council of Lloyd’s, established under the 1982 Lloyd’s Act, is the governing body and activities under its jurisdiction are governed by Acts of Parliament. Statutory regulations aimed at preserving the solvency and integrity of Lloyd’s underwriters differ from those applicable to insurance companies, though the intent is the same.
Unlike most of its competitors in the insurance and reinsurance industry, Lloyds is not a company. The Society of Lloyd’s was incorporated by the Lloyd’s Acts 1871-1982. The systems used for issuing policies, collecting and accounting for premiums, and dealing with claims also differ from those adopted by insurance companies.
Only accredited Lloyd’s brokers can place insurance at Lloyd’s. The Corporation provides the premises and all the facilities for those transacting business within its jurisdiction, together with the regulatory controls.
The actual business is not transacted by the Corporation of Lloyd’s but by underwriting members on the one hand and Lloyd’s insurance brokers on the other.
Underwriting members are individuals and their liability is unlimited. However, it would be impossible for all those who are underwriting members of Lloyd’s to transact the business individually and thus they are formed into syndicates in the charge of the person who is responsible for the transaction of the business on their behalf.
This person has complete power of attorney on behalf of the members of the syndicate.
Naturally, an underwriter with power of attorney needs to have assistance and this is provided by his accredited deputies. Those persons actually accepting insurance have of course to comply with rules and regulations and submit themselves to the disciplines of the Corporation.
The Lloyd’s insurance broker is the other part of the market and is also subject to rules and disciplines. He has to be accredited and membership is not granted freely. Only a Lloyd’s broker can enter the Underwriting Room and transact business therein. The ‘Room’, as it is called, is that place where the underwriters sit at ‘boxes’ and transact the business. It is normal for Lloyd’s brokers to be either limited companies or partnerships rather than individuals, and the chief executive of such a company or partnership is the broking member.
The staff of the company with broking powers are known as ’substitutes’.
There is in addition a category entitled ‘messengers’ who are allowed to take messages into the Room to give the broker but who are not empowered to conduct any insurance broking.
Lloyd’s broking offices range from the giant companies through medium-sized operations, to the very smallest broking firms. Many large and medium-sized offices employ specialists and operate a number of separate departments. Small firms may specialise in one class of business or another and operate with unique trade syndicates. For instance, one broking house concentrates on professional indemnity business, many others on reinsurance, yet others on the hotel and catering trade, and so on. Some small firms, however, operate a general business.
While there is a principle that transactions have to be carried out in the Room itself there are a few exceptions to this, it would be totally impractical for Lloyd’s to transact motor insurance business, particularly for individual policyholders, in this way. Certain motor insurance syndicates have overcome this problem by allowing provincial insurance-broking firms to deal direct with them but requiring that the premium is guaranteed by a Lloyd’s broking firm. Some of these syndicates have actually set up offices in provincial cities and the local insurance brokers deal direct with these offices. This method enables syndicates to compete with insurance companies having local branches.
Dave Healey is a specialist insurance underwriter who has been placing Classic Car Insurance and Specialist Home Insurance polices at Lloyd’s for over twenty years.
Business Interruption Insurance is usually sold as part of a Commercial Insurance combined policy or package and provides a layer of insurance against not being able to trade following a claim.
In addition to the physical loss of the claim, the financial loss to the business stemming therefrom needs to be dealt with by an interruption policy.
Formerly called ‘consequential loss’, ‘loss of profits’ and/or ‘profits insurance’, which can be misleading terms, the protection granted is in accordance with a policy formula, i.e. rate of gross profit applied to the reduction in turnover of the business in consequence of an insured peril, together with the increased costs to minimise an aggravated loss (but not exceeding the loss so saved) arising within the maximum indemnity period (as selected to be insured).
Provision is made for the accountancy definitions and the business, the premises and the insured to be defined. In any claim, adjustment can be made to the precious financial account figures so that the loss is in respect of the ‘would have been’ results that would have applied if the damage had not occurred.
The perils insured (for which there must normally be counter-part physical damage cover) can extend to include those normal to property insurances and such special perils as failure of public electricity or gas supply, loss from infectious disease for hotel and similar trades, or electrocution of cattle in farming risks.
Machinery breakdown covers can usually be arranged on selected plant. Advance profits covers can be arranged for new ventures and these may include marine transit risks.
Provision can be made, with first-loss limitations applying, to extend interruption insurance to protect the financial trading of the business following damage to other people’s premises (those of suppliers, subcontractors, customers, etc.) and in transit.
It is normal, in the current economic conditions, to insure 100 per cent of the remuneration of all employees at a reduced-rate level, but more employee cover can be arranged in this respect in suitable cases. This limited cover is largely a ’social’ protection to staff and their retention after a loss is thus safeguarded. While savings can be made by non-replacement where employees leave, the cover is not on the basis of the insured having to minimise the loss by dismissals.
The indemnity period, usually at least 12 months, is the limit up to which the recompense under the policy continues. It needs to be sufficient not only to restore the physical equipment and buildings but to allow turnover to reach the ‘would have been’ level. The sum insured is the forecast amount (including a margin to avoid under-insurance) that might be at risk for the 12 months from the end of the renewal period of the policy. Where the maximum indemnity period insured exceeds 12 months the figure is then proportionately increased. The premium is adjusted normally only to the extent of over-insurance.
For the small and medium-sized businesses, it is now possible to buy Commercial Insurance on what is termed a declaration basis. The cover may or may not include a maximum sum as a limit, but there will be no reduction applicable in the event of under-insurance (or a high sum insured limit is applied to avoid this); the premium is adjustable on the annual declaration,which must be received in a limited period from the end of the insured’s financial year.
The cover automatically provides for the cost of auditors in preparing financial details from the accounts, but not for the preparation of the claim itself.
It is often found that consequential losses will arise such as liquidated damages, above-economic increases in cost of working, deterioration or wastage of undamaged stock, etc. special items can be added to deal with these exposures. This section has indicated the need for individual review when arranging an interruption insurance and for the policy accountancy definitions to be suitable to the system of accounting adopted.
A further form of special cover called ‘book debts insurance’ provides for the loss flowing from the un-8urecovered monies from trading prior to the damage through the destruction of the account records and the inability to collect the outstanding debts. The essence of the insurance is the monthly declaration of outstanding book debts, which serves as a datum against which after damage the shortfall in recovery of book debts can be measured. A low rate is involved and the degree of duplication, protection of the records and sum insured determines further reduction to it.
It is in the field of interruption insurance that the importance of the assistance from loss adjusters and others arises, since as witnessed in the spate of recent natural disasters that have occurred, much can be done in emergency conditions to minimise the potential loss.
Business Interruption Insurance is today available on-line and is included as standard in all Commercial Insurance package polices. For larger business risks it is advisable to approach a specialist insurance broker direct.
As the CON DEM coalition Government budget deficit cutbacks begin to take effect, Insurance Blog asked one of the UK’s leading Unemployment Insurance specialists to look at where the cuts are going to be made and who is going to suffer……….
UK Government Cutbacks Will Widen the North-South Divide
News of job losses continues unabated. Not so much for those employed by the house builders or major financial institutions, but further down the economic food chain. Those companies such as fashion house Ethel Austin with 300 stores predominantly in the North of England. They called in the receiver in February 2010 and have since set about closing 120 stores and issuing 1800 redundancy notices. They, like many others shedding labour, held on waiting for an upturn in the economy that never came soon enough to save them. Faced with still hesitant consumer spending, their loses continued and creditors ran out of patience. However, for the North, it is about to get a lot worse.
The UK’s fairy tale economy saw a mushrooming of Public Sector jobs over the last 10 years. The broad industrial group ‘public administration, education and health’ covered 7.16 million jobs in 2007, 26.9 percent of total employment (Source: ABI statistics). Since then the Public Sector has grown whereas the Private Sector has been battered by the recession. In 2007 there were substantially less than one million unemployed, in February 2010 this figure had grown to 2.5 million (Source: office of National Statistics) and almost all of these job losses were in the Private Sector. Post election slashing of Government budgets is unavoidable and contraction of Public Sector jobs is now widely forecast. The only question is where the axe will fall.
The North South divide is about to get a lot wider as the cut backs in pubic expenditure will be felt most acutely in the North. Because of their national pay scales, the wages of Public Sector employees have always gone much further in the North. They offer the opportunity to spend significantly more in the local economy than their colleagues in the South, saddled for years with high mortgage costs and rents. This has benefited the money in circulation in the North and the boom in restaurants, bars and countless other businesses blossomed up and down the land. Just how much this was dependent upon salaries paid out of the public purse is about to become far more apparent.
Things have now changed and ‘its grim’ is about to return ‘up North’ because cut backs will be felt disproportionately by the major northern conurbations. Perversely, past efforts of Governments to create jobs in northern Britain are about to make matters worse. The Lyons Review from 2004 had a target to move over 24,000 jobs out of London by this year. However Lyons followed years of relocation of Government functions to the regions that started in the 1970’s. As a consequence, by 2009 in the North West 3.4% of total employment was in the Civil Service. This compares to a more typical 1.3% in Eastern England and just 2.1% in London despite being the heart of Government. (Source: ONS, Civil Service Statistics, 2009).
Politicians pledging to preserve front line services in Health and Education will only mean even more pressure is applied elsewhere. Once again it is the North, specifically core cities that are likely to bear the brunt. Local Government statistics show they employ just over 40 people per 1000 residents in cities across the UK as a whole. However, in Manchester this is nearer 45 and in Birmingham, Nottingham, Leeds and Newcastle there are over 55 per capita. Clearly these cities offer greater scope for large scale cut backs than elsewhere in the country.
Whether the Public Sector ‘efficiency savings’ manifest themselves in redundancies or just a recruitment freeze, the North’s disproportionate dependency on the public purse will weigh heavily for several years to come. Money will melt from local economies and it follows that particularly smaller or regional businesses will suffer as a consequence.
State benefits paid when out of work are pitifully inadequate to meet the outgoings of the average household. Therefore, should anyone not have savings to get them and their families through six months to a year of unemployment, they should consider Income Protection Insurance. This can be bought for much less than insuring a car. On-line there are Income Protection Insurance providers offering typical policy benefits of up to £1500 per month. This will pay to up to a year and is enough to meet mortgage and other big bills. Dennis Haggerty of income protection specialist iprotect insurance commented “The most popular benefit level chosen by our customers is £1,000 per month, the average monthly premium for this insurance is under £30.”
Income Protection Insurance is only available to people who are in work and have no immediate prospect of being selected for redundancy. So the time is running out for Civil Servants and other people in the Public Sector to secure this cover before the budget cuts for their particular area are announced.
Insurance companies are there to spread the risk of lost earnings. However they will not sell this type of cover to someone who is very likely to be made redundant, just like they decline fire insurance for a house that is already smouldering. With Public Sector jobs looking vulnerable, there has never been a more urgent time for anyone ultimately paid by the taxpayer to consider how they would meet their financial commitments if they were out of work. With a large section of the local workforce suddenly cutting back their spending because they are worried about their jobs, people employed in the Private Sector ‘up North’ should also be thinking how this could affect them and taking steps to protect themselves and their families.
| Dennis Haggerty FCII M IDM Marketing Manager iprotectinsurance.co.uk specialises in the supply of low cost on line Lifestyle Protection, Income Protection and Mortgage Payment Protection Insurance.
Key to the success of i:protectinsurance has been the focus upon supplying a product range that is available exclusively on-line. By eliminating the usual costs associated with selling insurance: telesales teams, direct mail, middlemen and commission, i:protect can offer customers exceptional value for money. The i:protectinsurance product range includes Income Protection / Lifestyle Protection, Mortgage Payment Protection, Gadget Insurance and Mobile Phone Insurance called Phone PLUS Income Protection Insurance and Mortgage Payment Protection Insurance |
