Archive for Insurance News

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’.

 

Was The RMS Titanic Sinking An Insurance Fraud?

In 1998 American Robert Gardiner in his book ‘Titanic: The ship that never sank’, first postulated the theory that on the 14th of April 1912, a hundred years ago today, that RMS Titanic was scuttled for the Insurance money.

More importantly it wasn’t even the Titanic that sank, but her older decaying and seriously damaged sistership, RMS Olympic, in what would become one of the greatest insurance frauds of all time – if proved to be true!

Was the Titanic disaster the greatest Insurance fraud ever?

Mystery, Myth and Money Surround The Whole "Titanic" Sinking Tragedy

Insurance Blogger whilst initially thinking what a load of ……, decided to look deeper into the ‘conspiracy’ and in particular the question of marine insurance for the vessel.

In order for the possibility of an insurance fraud to have taken place answers must be given to the following questions:-

Did the Owners, Company or individuals stand to benefit from the total loss of a ship?

Could the Titanic have been swapped for the Olympic as Gardiner proclaims?

What evidence is there to prove that the ship lying two and a half miles down at the bottom of the Atlantic is indeed the Olympic ?

Incredible as it first seems, the more you look into the assertations, the more feasible the fraud becomes!

And there is some amazing evidence to suggest that persons or persons unknown conspired to defraud the insurers of £1 million of hull cover, unknown P & I liability losses and cost life insurance and personal accident companies nearly £3 million.

Titanic – The Case for Insurance Fraud

Before we discuss the evidence for fraud in the sinking of the Titanic it is important to set the economic scene for 1912.
In particular the fight for the most lucrative transport routes at the time, not dissimilar to the airline struggles of today with the exception that sea travel had a monopoly on trans-atlantic trade, there was no alternative.

The White Star Line was ultimately owned by International Mercantile Marine (IMM) and after years of struggling to win trade, they commisioned the Olympic class liners in 1907 to try to take the luxury end of the market.
For the previous fifteen years the lucrative passenger sea traffic to and from the US from the UK, France and Europe was dominated by the super-fast German mercantile fleets that held the Blue Riband for the fastest crossings.
The SS Kaiser Wilhelm der Grosse and SS Deutschland (1900) owned respectively by the Norddeutscher Lloyd and the Hamburg America Line HAPAG, the two German top shipping companies.

In the UK, Cunard rose to the challenge with the launch of the RMS Mauretania and her ill-fated sister ship, the RMS Lusitania. The ships were very fast and the Mauretania went on to keep the coveted Blue Riband for more than twenty years, from 1907 to 1929.

The White Star Line, who had been losing money for years, struck back with the Olympic class and the upgraded Titanic was supposed to be the largest and fastest of the luxury ocean liners to rival the Maurtania for speed.

Construction of Olympic started in December 1908 and Titanic in March 1909.
The two ships were built side by side at Harland and Wolff’s Belfast Shipyard.
The construction of a third ship the RMS Gigantic began in 1911 after the commissioning of Olympic and Titanic’s launch.
Following the sinking of Titanic, Gigantic was renamed Britannic, and the two remaining vessels underwent many changes in their safety provisions. The Britannic was sunk by a mine in 1916.


What was Covered?

Willis Faber & Co. (today part of the Willis Group) are reported to have brokered the deal for underwriting the hull and cargo insurance for the Titanic. The original boat insurance slip was passed to Lloyds Mercantile Dept for underwriting, but is since reported lost to this day.

There is some dispute about the value of the Willis contract however all newspaper reports of claims paid out and enquiries staged immediately after the sinking report that the Hull was underwritten for loss and liability at Lloyds for $5,000,000.

In 1912 both the USA and the UK were on the Gold standard and the exchange rate was always very close to $4.87 to the £1 or 0.21. This meant that the policy for the hull was insured for around £1,050,000. Perhaps more importantly, the actual cost of building or replacing the vessel was £1,680,000 or $8m, meaning that the hull was significantly under-insured and the owners were bearing a third of the risk as captive. This was an unusually high amount of risk taking. At the time marine insurance would usually only provide for three quarters of the risks, as P & I Clubs (ship owners collective pools) always carried a quarter of the collision liability risk and provided accident cover for the crew, and still do to this day.
It is unknown what if any cover was paid out by White Star to a P & I Club for staff liability. What became evident after the event to many of the 800 plus families of the Crew that perished, who were nearly all from Southampton, was that they received paltry or little compensation for their losses and years of subsequent poverty.

In addition to the hull cover, the marine insurance policy issued by Lloyd’s to the White Star Line for the Titanic included total loss cover for cargo at $600,000 and personal effects at £400,000, which equates to £126,000 marine cargo and £84,000 for personal effects. Both these sums insured proved to be inadequate following the disaster.

What Was Lost?

In an act of incredulous speed all claims by the White Star Line for loss of the Titanic, were paid out within a week of the ship sinking and the Lutine Bell being rung at Lloyd’s on the 15th of April.

The company was reimbursed for the loss in a straightforward process that was completed long before any official enquiries heard evidence as to the cause of the sinking.

Claims for loss of life and personal effects were taking a little longer.
Imagine that today, when you have to wait weeks for compensation for just a minor car insurance claim!

The New York Times of one week after the disaster, reported the speed of the claims payouts and lists all the amounts claimed and the processes involved in the claim.

Titanic claims paid out in super fast time!

Click to read the original NY Times reports that all Titanic claims are paid out within a week!

The list of Claims losses paid out were:

Titanic Hull Insurance – Actual loss $8,000,000 – Paid out $5,000,000

Titanic Cargo Insurance – Actual Loss $420,000 – Paid out $400,000

Titanic Personal Effects – Actual Loss $1,000,000  – Paid out $600,000

Life Assurance Passengers -  Actual Loss >$4,000,00 – Paid out $2,125,000

Over 119 Life insurance companies paid out the largest of which was the Travelers Insurance company of Hartford, Connecticut.

Personal Accident Claims – Actual Loss >$2,000,000 – Paid out $1,564,000

Over 48 personal accident companies were involved in claims payouts.

The Olympic Switch

The case for an insurance fraud begins with the RMS Olympic. If a conspiracy to defraud existed it would have began sometime after September 1911 and before April 1912.

On September 20th 1911 while in the Solent returning to Southampton RMS Olympic was struck and severely damaged by a collision with cruiser HMS Hawke.

The Liner, despite being holed above and below the water-line in two places and damaged for 38 feet, made it the fifteen miles or so back to port under tug.

Eyewitness reports suggest that the route of the Hawke and the Olympic intersecting may not have been an accident at all. Interestingly, the Captain of the ship that day was none other than Edward J Smith, Captain of the ‘”Titanic” some seven months later.  The ship was temporarily patched up and returned to dock in Belfast alongside the nearly complete Titanic.

White Star quickly had the damage assessed by marine engineers, and put in a claim. However beause it was well below a policy excess of $750,000,  the claim was repudiated.  In December White Star brought the claim to court, this time claiming $750,000 for loss and damage to the ship including lost passenger effects, to make up the difference to the excess.

The court ruled that the collision was entirely the fault of the Olympic, the only saving grace being that they would not have to pay damages to the Royal Navy as the Olympic was under compulsory pilotage at the time. A further appeal was rejected in 1913.

Unable to collect money for her repairs, White Star was left with a severely damaged ship, quite possibly a lot more damaged than originally thought, which was losing money by the day, by being unable to collect fares and fulfill bookings.

Titanic and Olympic in Harland & Wolff Belfast

Titanic and Olympic undergoing sea trials in Belfast early 1912. But which one is which?

The basis of the case for conspiracy to defraud starts here.

Gardiner asserts that the damage to the Olympic was tantamount to a write-off. In particular the secondary damage to her starboard engines, drive-shafts and propellers which rendered her incapable of reaching speeds of more than ten knots as she limped back to Belfast for repair.

On closer inspection of the damage at Harland and Wolff it was realised that it would take six months to get her in the least bit seaworthy again. The repairs would have to be paid for by the White Star Line which was already committed to $16 million for the building of the Titanic and the half-built Britannic.

The costs of the repairs would in effect wipe out the White Star operating profit for that year, a third of the income of IMM, and the losses from having no ships at sea for six months would equate to another $500,000 plus.

The decision was taken by senior executives at both White Star Line and Harland and Wolff to swap the ships and bring into service, the very near to completion Titanic, as the Olympic.

If the decision had not been taken jobs would be lost and the shipyard and White Star would be threatened with closure.

Getting the Titanic a certificate of seaworthiness was at least six months away. Olympic already had one!

The Swap

Ship swap is reported to be the most common form of marine insurance fraud practiced in the 19th century although this is as yet unsubstantiated.

It would only take a handful of ready picked dockers and tug operators and a skeleton crew to be involved in any movement and re-berthing of the ships, particularly as they were constantly being put to sea for tests.

Both ships were mysteriously painted in the same black and white livery, the Olympic having previously been painted all white.

After the repairs in Belfast including changes to cabins, without doubt the only outwardly visible reported differences between the two ships appears to be the layout of the 1st class passenger B deck, which was enclosed on the Titanic according to the original plans. Photos of the ‘Titanic‘ leaving Southampton and Queenstown show a different layout!

Fitters, Electricians, carpenters etc in Belfast would not necessarily know which ship they were on a short term contract for, and even if they did, they were kitted out almost identically. Final fittings and named objects could have been loaded on-board in boxes to both ships at anytime. In the closed shop world of the protestant dockyards of Belfast and the fraternal offices above, a conspiracy involving less people than the Great Train Robbery is not so hard to envisage.

None of the crew or staff would have been aware of what ship they were on when they signed on in Southampton.  Just what the nameplate told them.

The “Olympic” put to sea and started earning off the North Atlantic run in early 1912. It was only two hundred miles from the “Titanic”  returning to the UK, when the “Titanic” sank!

There is some excellent photographic evidence which shows the damage repairs to the  Olympic following its collision with HMS Hawke and in later years where there is no sign whatsoever of repairs!

You can read more about the ship swap, see photographic evidence and watch a documentary at TitanicUniverse

You should also have a look at Mark Chirnside’s university dissertation which argues subjectively the case against a fraud.

Having looked at all the evidence Insurance Blog believes that a ship swap did take place, however not for the purposes of committing an insurance fraud but out of business economic necessity.

So how did what had been a business decision to hoodwink the Ministry of Transport turn into an insurance fraud?

Well the matter of an Iceberg for one thing!

Gardiner goes on to explain all sorts of incredulous reasoning about how White Star planned to scuttle the ship and had pre-arranged a collision in mid-Atlantic, however all this was unnecessary if the iceberg was just an accident.

This explains why the ship was under-insured, White Star never had any intention of scuttling the ship. The swap was purely to keep the company in business!

White Star did effectively gain out of the loss of the “Titanic”.  The loss cost them just £680,000.  A lot less than the $8 million required to fund a new vessel, which they did!

As an interesting footnote, Chairman of White Star J Bruce Ismay, the man William Randolph Hearst choose to bully and pillory as a coward, went on to hold prominent Director positions on the boards of the Liverpool and London Insurance Company, Globe Insurance Company, Royal Insurance Company and the Thames and Mersey Marine Insurance Company.

Comparing Commercial Insurance Quotes Online

A Guide to Comparing Commercial Insurance Quotes

You can’t turn the telly on these days without seeing an advert for tradesmans business insurance or commercial liability with all the big insurance comparison websites and direct insurance companies vying for attention at one dotcom or another. Insurance Blog asked Insurance Blogger Dave Healey to take a look at commercial insurance and small business insurance websites in the UK and see how easy it is to get commercial insurance quotes.

One upon a time it was virtually impossible to obtain commercial insurance quotes without a visit to the nearest regional General and Life offices of a large corporate insurer or if you were lucky a local high street commercial insurance broker who had access to at least one commercial insurance agency for most risks, and if really lucky this broker would have specialist business insurance schemes or access to Lloyds underwriting facilities.

Comparing Commercial insurance quotes just wasn’t an option for most businessmen who had better things to do with their time so they usually took the advice of a local broker who could at least place the business. Local and provincial brokers would appoint account managers and inspectors to regularly meet with their commercial clients and keep all the business local. Inertia set in and kept the competition down and prices for cover high.  Shopping around and comparing commercial insurance and getting a range of quotes just was not feasible until very recently…..

Today all sorts of commercial insurance products are available online either direct from insurers or via an intermediary such as a commercial insurance broker with online placement facilities. Some of the larger commercial intermediaries offer comparison sites for SME business, as do all the top four general price comparison sites that dominate the screens and rankings. The broker offerings are usually much wider than the price comparison sites and they have access to many more markets.

The downside to buying commercial insurance over the Internet from say a site more known for comparing car insurance or comparing credit cards, is that there is no one at the end of a phone to give you advice about your commercial risk and when it comes to claims…….computer says uh! Would you buy business insurance off this man?

For comparing commercial insurance quotes it is always wiser to use a broker comparison site. A UK Commercial Insurance broker site will allow you to compare products and prices from all the top insurers on their panel and offer advice and claims help when you need it. They can also arrange for cover for larger risks and provide services like surveys which are often a condition of the commercial insurance quotes given imposed by the system underwriting rules.

If you operate or are responsible for any type of business entity or commercial enterprise, in order to obtain the right insurance for the company you will need to find and compare suitable commercial insurance quotes. A quote is an offer of certain defined insurance covers in a policy for a monetary price.

Quotations can be obtained from numerous sources including locally from specialist high street insurance brokers, over the phone from insurance companies or brokers, or from the many online companies and comparison sites offering all types of insurance cover.

A commercial insurance quote forms a legal offer and is the basis of the contract of insurance between the proposer and the underwriting company. The information you provide on the quotation form is used to calculate both the premium quoted and the levels of cover offered on a policy. The quote data a company provides will be used to complete the policy documents. It is therefore very important that when applying for commercial insurance quotes that the information you supply about your business activities is correct and truthful.

Most companies offering quotes will agree to honour the price offered for a period of thirty days or one month following its issue. When obtaining a quote, regardless of the source, ensure that you retain the reference number which will enable you to either take up the or recall and revise the offer at a later time. Prices offered can fluctuate and a premium offered one week may not be available the next.

Quotes and premiums can be obtained for all business types and all business and commercial risks for both business liability and property insurance, either separately or combined in what is known as a package.

Commercial property insurance will typically provide cover for buildings and contents of business premises of varying types and sizes. For example a shopkeeper would be interested in covering his glass shop front and shop stock whilst a small draughtsman business would require a price for covering the business office equipment. For this reason quotes for a business are often given by insurance companies for packaged policies that are property specific, such as shop insurance quotes or office insurance quotes.

When looking for cover search for companies that offer quotes for your particular type of building. Let property buildings only insurance quotes are available for landlords who just want to cover the buildings, fixtures and fittings. Equally commercial property tenants and lease-holders can obtain quotes that only cover the contents, stock or liabilities.

Liability quotes can be obtained with either combined property insurance packages or as a standalone quotation for individual business liabilities. The most popular liability products quoted for are public liability insurance, employers liability insurance, product liability insurance and professional indemnity insurance.

Commercial liability quotes are widely available online for most trades and professions. Packages often offer all risks cover and if you are looking online most systems allow you to pick and choose various liability coverage options

When comparing quotes online you will not have the assistance of a broker to advise you. It is vital therefore to ensure that you check that the levels of indemnity and covers offered are sufficient for your business, because levels of commercial insurance cover quoted for, can vary as often as the price.

Commercial Insurance quotes are available from UK Commercial Insurance who operate one of the UK’s largest online commercial insurance comparison and online brokerages.

Street Party Insurance for Diamond Jubilee Celebrations

Britain has a history of partying in the streets, going back centuries. In recent years, on a National scale, only the Victory in Europe Celebrations in 1945 have eclipsed major Royal events such as the various Royal weddings and the Silver Jubilee street parties of 1977, in street party popularity and attendance.

However since the millennium street parties have become regular events in all types of communities both urban and rural who regularly hold street events bringing all different members of the community together in celebration.
The Big Lunch event organised by the Eden Project on streets up and down the UK, is now in its tenth year and with over one million participants each year is one of the largest nationally organised parties.
The Diamond Jubilee of Queen Elizabeth II is expected to increase the number participating by a factor of ten and street parties are also being planned throughout the Summer of 2012 for sporting events such as the European Football tournament and the London Olympics, which will further spread the craze.

Are there street party rules?

If you are organising a street party in your road you may not need a licence from your local council if the party is of a small size. However if the party is likely to interfere with traffic and parking or may disturb other residents, it is likely you will need a council licence. Check the rules for your area on your local county council website or refer to the UK Government advice about street parties at Directgov. A street party licence usually has a condition that minimum £1 million of public liability insurance cover should be in place for the licence to be valid.

Street Party Insurance covers

street party insurance - instant online cover

Even if your street party does not require licensing, it is highly advisable to purchase street party insurance to cover all the organisers and attendees against any injury, damage or loss and the consequences of the organisers being liable for any court awarded damages and costs.
Unfortunately parties and events where people relax and enjoy themselves, particularly if alcohol is involved, often end up in loss or personal injury.

All party insurance policies carry public liability insurance as the most basic cover with the option to add employers liability, cancellation cover and property damage cover up to a fixed amount. Employers liability cover is a legal requirement of street party organisers if you employ any staff to help or organise the event.

Purchasing street party insurance online is nowadays a straightforward process and packages for jubilee street party insurance cover are available at very competitive rates from leading event insurance specialists such as EventsInsurance.co.uk
The application is quick and can be completed online with the premium calculated from fixed rates. Customers can choose varying levels of indemnity for liability covers and choose to add on cancellation covers and property losses up to £50000 if required. Premiums for a small street party start around £50 per day and the costs are minimal when divided up amongst the neighbours. The larger your road the cheaper the insurance costs per capita.

Unemployment Insurance – Last Chance For Public Sector Employees

Unemployment has risen to over 2.5 million in the UK and with the future of many public service workers jobs in doubt, is expected to rise to levels of over three million by Christmas.

Todays official figures show levels of unemployment last enjoyed under Margaret Thatcher’s Tory Government of the Eighties.

Youth unemployment is at its highest level for 19 years.
Womens unemployment is at its highest level for over 23 years.
The public sector is traditionally a large employer of both these groups.
The Governments argument that the private sector creating new jobs will prop up the public sector has proven to be widely inaccurate.
David Miliband pointed out that for every two jobs lost in the public sector only one was being created in the private sector.

The result is that the economy is in a downward spiral and the public sector job cuts are fuelling the maelstrom.
Maybe our public schools are failing as well, because it is obvious that neither David Cameron or the Chancellor bloke, whose name Insurance Blog can’t remember, have even the basic skills in macro economics!

When there was a global depression in the USA in the late 1920′s, FD Rooseveldt’s ‘New Deal’ of public works and public sector employment, brought America out of the downward spiral and introduced infrastructure which gave the post war US a massive competitive advantage.
President Obama has finally realised that cuts don’t work and has announced a massive Federal investment in public works. Alex Salmond, Leader of the Scottish Parliament today said that unemployment was down in Scotland during the last three months due to a large public building program.

David Cameron is carrying on making people and public sector workers unemployed.

If you work in the Public Sector there is still time to get unemployment insurance and income protection however you must hurry.

Income Protection Insurance is available to eveyone in full time employment. As long as you have not been informed by your employer that your job is at risk, you can still take out an income protection policy.

Act quickly and you can protect your mortgage, rent and other regular payments such as council tax, utilities bills, finance agreements and even gym memberships and satellite/cable tv bills. With low monthly payments you have a choice of cover between accident, sickness and unemployment, accident and sickness or unemployment only, with 12 or 18 month benefit options.