Archive for Insurance Companies

RBS Sells Off Direct Line Insurance Cheaply!

City Analysts are stating that the flotation of  government owned Direct Line is priced well, as the share price is up 7% today on the grey markets from the initial offering of £175 per share. The official floatation is not until the 16th of October.

However this begs the question that the company is being sold cheap and the taxpayer losing again.

The UK government has pumped more than 21 billion pounds into RBS, and the insurance side is one of the most profitable areas.
The Stock market listing of the company, which also owns the Churchill and Green Flag brands,  is the largest in London this year.
Private investors have been less sceptical about the float than other institutions.

At 175p a share, Direct Line would have had a market value of £2.63bn, which is much is lower than a £2.8bn-£3.5bn value placed on the insurer by the IPO advisor. Clearly the private investors see a quick profit to be made.

The future of the Croydon based company, which invented call centres, might appear rosy to those looking to make a quick buck, however the UK car insurance market is already saturated and the competition enquiry into car insurance might crimp future profits, however the brand under new management has been seen to perform well over the last two years.

Insurance Companies Should Support Barclays Shareholders Bonus Demands

Regular readers of Insurance Blog will know that we are not fans of Banc-assurance, indeed if it was mandatory you’d find us voting for UKIP in next months local elections!

The whole concept of banc-assurance, a European import of the mid Nineteen Nineties, with it’s centralised lifestyle, bank and insurance personal umbrella,  has stunk of plutocracy since the cosy relationships were first formed to maximise profit for the few.

PPI claims and mis-selling are just one example of things that would never have occurred if Banks had not been allowed to sell insurance products. (or should I re-phrase that ‘mis-sell’).

Large un-democratic multi-nationals are not good for competition or the UK Economy and the evidence shows that they are stifling business growth. Critics may argue that the market will decide and shareholders make this process democratic.

Not when over 70% of the shares in the Banks are owned by the large Insurance Companies, including in particular the large life  insurance and pension fund composites of Aviva, Legal & General and RSA, to name just a few!

Don’t just blame the previous Labour Government (FSA) for the mess that was created outside of their control. The fact that as predicted here two years ago, the UK has this week slipped into the dreaded double-dip recession, shows the problem is fundamently structural and lies in the ownership, management and control of the banks and mortgage lenders who control the money supply and are responsible for the current Western recession.

Incidently, by restricting credit they are also currently responsible for killing British entreprenuerial spirit and destroying growth potential in SME business.

The poor management speaks for itself in shareholder dividends. Just a penny in the pound for those poor shareholders of Barclays!

Today they are openly up in revolt to demand that the Chief Executive is not worth his $4 million annual bonus. Quite rightly so in our humble opinion. The overpaid who fail should not be rewarded, especially at the expense of those who take the risks.

Barclays chief executive Bob Diamond received a £1.35m salary and a £2.7m bonus for 2011, with an additional £2.25m in long-term incentive payments. Barclays has set aside an extra £300m for settling claims of mis-selling payment protection insurance. A £2.62bn accounting adjustment and the extra Payment Protection Insurance Claims reserve meant the bank reported a statutory pre-tax loss of £475m in the first quarter of this year as opposed to a £1.66bn profit a year ago.

More importantly though, the actions of these minions will fail as the outrageous bonuses are supported by the Insurance companies, who own big blocks of shares and voting rights.

There is your Plutocracy!

Regardless of your political allegiances, before you renew your insurance, if you can afford to that is, think about how these multi-nationals are encouraging the sort of undemocratic behaviour seen today that should not be seen at all, especially in a time when millions of families in the UK, it has also been announced today, between them owe £58 billion in debt mostly composed of interest and bank charges, to these very same ‘institutions’.

 

Shadow Banks Not Banks To Blame For UK Economic Crisis says FSA

Lord Turner, Head of the Government owned,  insurance broker  subsidised UK financial services authority the FSA, has been busy espousing his thoughts on the current economic crisis and apparently the banks are not to blame for the banking crisis!

It’”s not the banks, its the Shadow banks who are to blame”, cries the Lord. These shadow banks are still out there doing damage’ said the Lord, and one can only suppose from his attack that their activities are outside the control of the current banking reforms, and his influence.

Shadow Banks? What on earth are they then me lawd?

Well according to his honourable lordship in last nights speech,  “In autumn 2008 the developed world’s banking system suffered a severe crisis … but it’s striking that the crisis did not initially seem to be one of banks themselves, but rather of an apparently new phenomenon: shadow banking. So we need to ensure that our regulatory response appropriately covers shadow banking as well as banks.”

(Whooa! Hold on me lawd. What about the activites of RBS, Northern Rock, LLoyds etc etc etc. Insurance blog got sick of writing about the baknks in the autumn of 2008. Read our archives!)

Lord Turner then described shadow banking as activities including securitised lending, hedge funds active in credit markets, investment bank trading of credit securities, the issuance of asset-backed commercial paper and the repossession market.

Hmm, yes that covers just about everything that Banks and Insurance companies do with your money when they take your salary, insurance premiums and mortgage payments.

Which begs the question that those in the UK insurance sector have been asking about the FSA since its foundation in 2005. Just what regulatory powers can the FSA possibly have over the Global Free Market other than being a souped up consumer protection vehicle through the FSCS, beggars belief.

If it is aware of all the shadowplay, which is carried out by all the big groups, banks, insurance and assurance companies and holding companies that the FSA is supposed to be regulating, then just what can it do to avert a future scenario like we saw in 2008?

Insurance blog is still firmly of the opinion that the FSA is full of overpaid, bloated bureaucrats, funded by insurance fees, that is no better than an after the event vehicle and punishment body for money making in  fines.

Face it Lord Turner, the FSA will never be able to tell the City how to do business only maybe how to conduct it!

Royal Bank of Scotland Insurance Ungoes Rebrand

Have you noticed the large number of prime time adverts on UK television this week for Direct Line?

You know the banal ones featuring Alexander Armstrong of Pointless and Pimms O’clock fame ranting on about ‘you won’t find us one car insurance comparison sites’ and ‘twelve months cover for the price of ten’

No? Well you should take notice of them as you the British taxpayer have an 82% share in their success, for now.

Royal Bank of Scotland Insurance, a subsidiary of RBS the toxic bank bailed out by the UK Government in 2008 and the major reason the Bank of England has had to create over £200 billion of debt, is looking like it is the first of many parts of the operation that will be sold or hived off.

RBSI this week renamed itself as Direct Line Insurance Group and changed its company status to a plc from a private limited company. This move suggests that it aims to openly float on the Stock Exchange although it could be priming itself for a private sale to one of the large multi-nationals.

A question mark hangs over the over famous brands bought by RBSI including ageing dog Churchill and ‘Joanna Lumley’s’ Privilege. Perhaps these could be sold off separately or with their own book of business. RBSI also own the commercial insurance broker only channel NIG, which is the antithesis of Direct line in it’s structural model.

The UK Government has stated that all of RBS Insurance interests must be disposed of by 2014.
Just in time for Scottish Independence!

Insurance Employees Favourite TV Shows

It was very hot at the office of Insurance Blog today and not the best of working conditions.

However a bit of light relief went around the office with the results of the Insurance company department favourite gameshows of all time poll.

Here are the results in no particular order…….

Insurance All Time Favourite Game Shows

Underwriters – Jeopardy
Loss Adjusters – The Price is Right
Actuaries – 15 to One
Marketing Department – Catchphrase
Claims  – Total Wipeout
Accounts – Double Your Money
New Business – Blind Date
Personnel – Britains Got Talent
Senior Management – Big Brother
Claims Fraud – Give Us a Clue
IT Dept – Eggheads
Call Centre – 100 to 1
Products Department – Take it or Leave it
Risk Assessors – The Weakest Link
Account Executives – In it to Win it

Well its nearly silly season…

If your Insurance company department has a favourite gameshow or even maybe a favourite song, write and let us know at the email address at the bottom of the page……