What should be the greatest advertisement for being fully insured, can turn into a PR nightmare for the insurance companies. They never seem to get their act together when they are needed most, but once again, this is not actually the case either. In fact everything hinges on the quality of the insurance companies claims handling.

The cameras will not revisit houses where they have been completely restored and look immaculate with new decoration and furnishings throughout. Neither will commentators mention the number of cars insurance companies swiftly paid out for after a flood.

An example of good claims handling is the speed an insurer will make a payment on account for emergency work or to enable their customers to move into temporary accommodation. Those affected will get to know where builders gut and rebuild a home at the insurance company’s expense, as they will those who seem to spend months haggling.

Quality claims handling is all about treating the customer as an individual and taking responsibility for the claim from beginning to the end. In contrast, those companies that just focus on the process and chiefly see their role as cost reduction, are almost incapable of delivering good customer outcomes. They are set up to fail, inevitably their complex system will ‘drop the ball’ at some point.

If their customer  has to ring around and then sent from pillar to post to chase up their claim, they will immediately tell everyone that this is not what they signed up for. Being kept on hold for several minutes can be OK, provided the person who picks up the call can deal with the problem. But if they just send the caller to another queue to speak to someone else, this is just bad service in action.

Good claims departments make or break an insurance company. However, that is not just from the viewpoint of their first duty to deal efficiently with own customer’s claims. Not paying out is also very important. Particularly if they are good at detecting fraud, for example third party ‘claims rings’ where criminal gangs make money from staged accidents. In these cases a good insurance company will have the expertise and ability to gather evidence that could ultimately help with a criminal conviction. Ultimately, an insurer that is good at dealing with fraudulent claims, will see an improvement in their claims costs that in turn will enable them to price more competitively. In this case everybody wins, including their customers.

Are claims departments a good place for an insurance company to invest in efficient and customer focused service? The customer would say of course. An excellent example of where this can been seen in action is the niche on-line provider iprotectinsurance.co.uk. They have achieved outstanding feedback from customers, yet in their field of Mortgage Insurance, offer some of the lowest premiums in the UK.  Since 2007 they have proven that offering a good claims service does indeed deliver low prices and has been critical to establishing their reputation and success.

Author Dennis Haggerty is a Chartered Insurer and Fellow of the Chartered Insurance Institute and is currently Marketing Manager at Wessex Group.

No we are not talking about global warming, plate tectonics, mega tsunamis, giant asteroids, disclosure and alien invasion or the Satanic manoeuvrings of the New World Order, but something much more likely to occur first.

The Insurance companies are starting to prepare for the event for the simple reason – it has happened before!

In late August 1859 a very strange phenomena was experienced all across the World which had never been reported before. It was only a short period prior to this date that man had started using electricity for technology.
The first electronic telegraph dates from 1832 when it was invented by Schilling.
As the event occurred, all across the globe telegraph systems failed, in some cases burning out and shocking the users and in others, continuing to transmit code even when disconnected from the electricity supply.

The phenomenon became known as the Carrington Event, was named after a British scientist who first identified the cause – simultaneous coronal mass ejections or CME’s. The CME’s of August to September of 1859 were the largest ‘solar flares’ ever recorded to date.

Threats to the Earth from the Sun include coronal mass ejections and solar radio bursts which create solar winds, solar radiation storms of cosmic rays and magnetic storms.

Coronal Mass Ejection

All of these have in the past since the Carrington Event occured on smaller scales and disrupted power stations, power grids, telephone and television systems.
Since the advent of the digital age, all inter-connected systems, computers and the Internet and homes and businesses are now at major risk.

Solar activity occurs in known 11 year cycles and we are now entering a phase where a large CME or worse is expected anytime between 2012 and 2015.

This fact has not gone unnoticed by Insurers and Governments and Lloyds of London have issued numerous warnings and produced white papers on the global risk potential to business and society.

The largest risks are to power supplies and communications which if destroyed or shut down globally for large periods of time, will be the the proximate cause of the rapid mass breakdown of society as we know it. The scenario is truly frightening and it doesn’t take too much of an imagination to visualise the consequence.

Doomsday!

The Doomsday Vision of the Prophet Ezekiel

When a large CME occurs the size of the Carrington Event the World will have in the region of 12 to 17 hours of warning to prepare itself before we are hit by the ‘storm’. The normal rate at which solar flares take to reach the earth is two to three days.
Governments will not be able to supress that the event is about to occur due to the numerous individuals and agencies around the globe who are constantly watching and recording solar activity.
However short of sitting on your own personal Faraday cage with electronic equipment, batteries and generators, there is little that a business of individual can do to protect themselves from the electro-magnetic pulse and nothing much can protect from the cosmic radiation.

In a worse case scenario all power stations will be knocked out, transmission cables and electronic equipment – fried.

Satellites, television, radio, landlines, Internet and mobile phones will cease to function and there will be a Global communications blackout that could last for years!
Transportation will be massively affected. Trains, trucks and cars will stop working and planes will literally drop from the sky.

Electronic money will become worthless as ATMs and the systems that control them will be fried globally. Businesses will not be able to carry out any transactions and food supplies will rapidly diminish leading to massive civil unrest and riot.
Water systems which rely on pumps will fail to function and sewage and waste build-up will lead to large scale disease and death.
More frightening will be the secondary damage caused by the failure of the initial systems, such as was witnessed recently after the Fukushima Tsunami incident. When backup diesel generators for water cooling pumps failed due to a lack of supply,  it led to a nuclear core meltdown and radiation emissions not witnessed since Chernobyl. There are approximately 450 nuclear reactors worldwide!

No part of society will escape the consequences of such an event. Business interruption insurance and failure of service supply cover will either reach maximum levels of indemnity which are insufficient or be declared a fundamental risk.  The only action that individuals and businesses can take to mitigate the damage is in the words of Baden-Powell, to be prepared!

Further Reading

Coronal Mass Ejection – http://en.wikipedia.org/wiki/Coronal_mass_ejection
Carrington Event – http://en.wikipedia.org/wiki/Carrington_Event
Lloyds Global Risks White Paper – http://www.lloyds.com/~/media/Lloyds/Reports/360/360 Space Weather/7311_Lloyds_360_Space Weather_03.pdf
Lloyds of London Space Weather Report – http://www.lloyds.com/news-and-insight/news-and-features/market-news/industry-news-2010/be-prepared-stormy-space-weather-ahead
CME Nuclear Risks – http://beforeitsnews.com/space/2011/09/1089880-1089880.html

The technology works by having a ‘black box’ fitted under the bonnet of the insured vehicle which measures the drivers performance and sends data using a variety of techniques, to the insurer for analysis and pricing.

Premiums are initially charged using known risk data and rating factors and then adjusted up or down over the course of the policy life. Many large car insurers have adopted the technology in a bid to win a larger share of this lucrative yet risky end of the market and in many cases premiums for young drivers have been reduced.

However questions are now starting to be asked about the accuracy of the data and the consequent pricing models.

The typical system works by measuring location defined by GPS, the time of day and certain performance related measurements for acceleration, speed, cornering and braking. A scoring method is applied to each of these criteria to determine the drivers performance and additional premium or future discounts are applied dependent upon these scores.

Clients can then access their account either online or via a mobile phone app where they can see how well the insurance company thinks they drive and discover whether they will get a refund or be charged more. The customer application often known as a dashboard shows the drivers perceived peformance in a colour coded Green – Amber – Red layout with performance rated from 1 bad to 5 Angelic.

However many drivers are now complaining about the fairness of the system and the measurement and charging methods and this week the BBC Radio 4 consumer complaints program ‘You and Yours’ reported on the growing number of dissatisfied drivers.

One particular interviewee a Mrs Bev Stainsby took out Co-operative car insurance at a cost of £1100 to cover herself and her young son using the telematics system. The car was driven for a short period of time by the youngster before he went away to university. Since then the car has been driven exclusively by Mrs Stainsby who when she took over usage noticed that the dashboard scores were declining and further charges might have to be paid. She only uses the car to commute 20 miles per day on a straight road and was horrified to notice that the system was penalising her driving particularly for cornering and braking. She doesn’t trust the calibration of the telematics and upon enquiry was fobbed off by the insurer with the excuse that the scores are averaged over the year. A spokesperson for the company admitted that insurers adjust the basic system scoring against known data collected from its other drivers using the boxes, but defended the performance calibration. Mrs Stainsby is not happy! The program is available to listen to on BBC iplayer for a short period of time.

Steve Davis of online specialist car insurer Car-Insurance.tv said “Although the telematics driven policies can have benefits to both the driver and the insurer, the systems are still in their very early stages of development and there are some large concerns that customers should be made aware of. In particular the question of privacy.”

“The system allows insurance companies to completely profile your lifestyle, way beyond your driving skills. It allows them to see exactly where you go, who you visit, when you go out and also classifies you as a certain type of driver which may adversely affect you in the future.  Clearly there are problems with insurers adjusting the calibration scores and until a defined set of  performance skill scoring is adopted across the industry, many drivers will be financially disadvantaged by belonging to the ‘wrong’ pool of drivers defined by a particular company’s dataset.”

“Furthermore, where multiple drivers have access to the same vehicle, the data cannot be trusted as a definition of risk and pricing anomalies are bound to occur”

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.

The problem stems from the on-board computer and the associated key-fob technology which allows car thieves easy access to your vehicle.

Technology has been widely available and can be obtained on the Internet, that allows would be thieves to tap into diagnostic system of the on-board computer and clone the key technology, allowing easy access to the car.

The problem has been exacerbated by recent EU competition directives that allow non BMW garages the ability to access diagnostic systems.

West Midlands police have reported 154 thefts of BMWs with this technology in the last three months.

The Government sponsored company responsible for setting the insurance security rates Thatcham Research thatcham.org for members of the ABI reported the problem to insurance companies  over nine months ago. They have refused to downgrade the 5 star security rating of the affected models as they state this would be unfair to the manufacturer.

The BBC has been leading an awareness campaign for owners of these BMWs with its consumer affairs program Watchdog and Radio 4.

Speaking on Radio 4 a Mr Gordon who is a director of Southampton Football Club said he was treated like a criminal by his car insurance company LV after he made a claim for theft. Despite having both keys in his possession and a CCTV tape he managed to secure from close by to where the car was stolen from he claimed that LV  inferred that he was party to the theft. They sent out a private investigator to interview him and  treated him as a suspect. It took them 9 months to finally settle claim, only paid out the minimum amount which was a lot less than the cars value and he lost his no claims discount.

When contacted BMW suggested that any concerned owner should contact their  dealership and fit secondary security devices such as steering wheel crook locks.

Popular theft includes the lead from off of church roofs, cast iron drain and manhole covers from the streets, railway track and copper cabling from permanent way and sidings, all types of electrical cabling from business premises or unoccupied buildings. Nowhere is immune to the theft and reports have been made of damage from all corners of the country.

A spokesman for the ABI said that metal theft had doubled in the UK in the past five years with now around 1,000 reported police and insurance claim incidents each week.

The disruption the crime causes is estimated to cost the UK economy about £770m each year. Much of this is paid out in claims for business interruption.

The ABI report said metal theft was an “ever-present threat” and it will meet the UK Government and British Transport Police to debate the issue.

Nick Starling, the ABI’s director of general insurance, said: “Metal thieves are putting lives at risk, causing expensive damage and massive disruption. “This is why we are working with the Government to crack down on metal thefts”.

The ABI support legal action which will make it harder to resell stolen metal and much tougher penalties for offenders and are calling for scrap dealers and metal recycling industry, which is  is worth an estimated £5.6bn per annum and employs 8,000 people in the UK, to be registered and cash payments to be banned.

Chris Coates of UK Commercial Ltd insurance brokers warns businesses, especially those at risk to take extra precautions to prevent theft and to minimize any disruption caused which often amounts to the biggest loss.

“All businesses large and small should carry out their own internal risk assessment as to the likelihood of suffering from a metal theft crime.”

“The theft of  a roll of lead cladding from the roof of building housing a computer repair business, could be devastating if it occurred on a wet stormy night. Often extra preventative security measures such as denying access to the roof through for example the application of anti-climb paint, is a simple, effective and cheap method of deterring metal theft.”

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’.

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!

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.

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 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.

Despite the banks and others who missold payment protection insurance (PPI) being forced to pay out over £2 billion to date, it appears from the latest reports and estimates that this could be just the tip of the iceberg as the misselling scandal escalates, with an expected final payout of over £9 billion in compensation. Billions are still waiting to be claimed.

Last year alone over 200,000 complaints were made to the Financial Ombudsman about individual policies, despite instructions from the FSA for all those involved to deal fairly with their customers.

Both these figures indicate that although most of the major financial institutions and banks that missold PPI are taking some steps to compensate those that they missold the products to, many people are either not being notified that they are due for compensation, or it appears that an even greater amount may not be aware that they even had PPI and that they have been paying for it in charges since they first took out the debt.

It also appears from the number of continual complaints to the Financial Ombudsman that the compensation offered by those guilty financial institutions has been in many cases derisory or insufficient.

This has been particularly the case where individuals have sought to deal with the PPI claims themselves, rather than seek the help of those professional claims teams and lawyers who have years of experience in maximising claims settlements through negotiation and the courts.

The FSA is concerned by the titanic scale of the misselling and has extended the period for which claims can be dealt with in order for the firms and the courts to deal with the high demand.

PPI was missold throughout the last decade by nearly all the major institutions including all the high street banks and most of the mortgage, loan and credit card companies. It was often sold on the back of credit agreements, where it was neither explained properly to the client or the client do not want or need it.

Many people who were aware they had purchased PPI, bought the cover because they feared their credit application would be refused if they did not agree.

In the most extreme of cases it was often sold to people who could never claim, such as those with existing medical conditions, pregnancy or the self-employed.

If you think you may have been missold PPI, Insurance Blog urges you to check the wordings of all your credit agreements and to act quickly to contact a PPI claims specialist to assist you in your fight for compensation.

The iceberg of claims may be melting slightly, however there are rules of limitation under UK law and the right to be compensated for being missold PPI may not be around for too much longer.

Despite the unusual and monopolistic ways in which marine insurance is still delivered to the global market, the actual risks themselves are very well defined and easy to understand, mostly due to time honoured knowledge and the Marine Insurance Act of 1906 which set the standard for all modern underwriting.

London remains to this day the global capital for placing Marine Insurance risks

Insurance Blog asked Insurance Blogger to get down to the jetty and investigate the market for marine insurance…

Marine Insurance

Hulls, Liability and Marine  Cargo Insurance
Marine insurance was the very first type of insurance contract and has a fascinating and complex history dating back to the earliest coffee shops in London in the Seventeenth century.

Marine insurance is designed to cover watercraft of all shapes and sizes, from the smallest dinghy to the largest passenger liner, however the term as opposed to boat insurance, usually refers to the coverage for larger ocean-going vessels and ships.

The cover has no geographical limits and therefore can insure any vessel under any flag in any part of the world.

The marine market covers a wide variety of risk types including tugs, ferries, liners, cruise ships, dredgers, oil rigs, oil tankers, cargo vessels, drilling platforms, heavy lifting vessels, barges, fishing fleets, motor cruisers, salvage vessels and yachts to name just a few.

Marine insurance has three distinctive risk groups, cover for which can be bought separately or together if necessary and is available for small boats through to ocean-going vessels:

a) Hull and superstructure cover

b) Liability insurance

c) Marine cargo insurance

Hull and Vessel Property Cover

The hull and superstructure cover covers the physical vessel itself against a list of maritime perils and is subject to what is called the ‘Institute time clause’.

At the turn of the twentieth century the Institute of London Underwriters, a collective of Marine Insurance companies and the Lloyds market, agreed and introduced standardised time-tested insurance clauses, and these have been used globally for marine insurance ever since.

The clause is written in plain English and is attached to a policy that contains no information on the conditions of cover itself. It sets out details of the specific marine risk to be covered and the underwriters agreed proportion of that risk. The time clause usually applies to a twelve month period but can be bought for a single voyage.

The cover always extends to both physical damage to the vessel and collision liability.

The insured ship or boat is covered for loss or damage for a list of maritime perils called ‘perils at sea’, fire, explosion, violent theft, piracy, jettison, earthquake, tsunami and volcanic eruption.

Material damage to the ship is also covered for landing and docking equipment, aircraft, accidents in loading and unloading cargo, latent defects and negligence of the officers and crew.

Liability At Sea

However most policies to this day for larger vessels, only cover three-quarters of the risk for collision liability and damage to other vessels. The other quarter is often provided by specialist P & I clubs.

In 1885 marine insurers found themselves unable to cover some of the emerging liabilities of shipowners. Protection and Indemnity associations, known as P & I clubs which had been formed earlier to break the monopoly of the marine insurance market, started to take on these ‘excess of loss’ risks.

The scope of the P & I cover is wide, but in addition to the cover for collision liability provides protection for loss of life and personal injury claims, amongst other crew related benefits.

The associations do not charge a premium as such, but the shipowners pay an annual membership fee into a common pool.

Other marine liability insurance cover that is available are charterer’s liability cover, ship repairer’s liability cover and mortgagee’s liability cover. Liability insurance is often placed in the open market.

Marine Cargo Insurance

The third major marine risk is that of cargo insurance.

Like hull cover the polices are governed by Marine Institute and Trade Association clauses, the main ones which are known as the ‘A,B and C clauses’.

The ‘A’ clause is an ‘all risks’ policy in as much as it covers all damage and loss to the cargo at any stage in its journey.. The other clauses cover named perils only, but can often offer much wider cover for specific risks such as piracy at the Horn of Africa.

Cargo is transported either ‘Free on Board’, which means that the seller is responsible for insuring the cargo until it is safely landed on the ship, or Costs, Insurance and Freight (CIF), which puts the onus of responsibility for covering the safe passage of the cargo on the buyer.

Many people are interested in the safe passage of marine cargo and the level of insurance, which today also includes aircraft transportation.

Those interested include the manufacturer or seller of the goods being shipped, shipping agents, freight forwarders, hauliers, shipping companies, intermediary consignees, selling agents and customs officers at both ports of entry and departure.

Boat Insurance is a London based marine insurance brokerage and underwriter at Lloyds, which can provide all classes of marine insurance.

Originally published online for Insurance Blog by Insurance Blogger

If you are in business you will want the re-assurance that the business insurance policy you bought is actually going to cover your losses and pay out in the event of a claim.

It is an unfortunate fact that when then worst happens and your business makes a claim on the policy, that either the offer from the insurance company is nothing like what you lost or expected to receive to get the business flowing again, or worse still that the claim itself is contested or repudiated.

The majority of these problems occur at the proposal stage which translates in modern parlance to the quote stage.

All the information a business supplies when applying for business insurance quotes online, will eventually become part of the policy contract. All insurance contracts come under a class of legal contracts subject to the rule of ‘utmost good faith’ and this requires full disclosure of material facts. If mistakes are made when filling in online forms and comparing business insurance quotes, then this will cause problems for the policyholder when a claim is investigated.

The FSA is already investigating the use of default data in form fields for personal lines products sold online and the potential for these contracts to be missold. We asked Insurance Blogger to have a closer look at this increasingly occurring problem that will only be exacerbated by the increased popularity, particularly for small business insurance, of using an online business insurance supplier.

Get Your Business Details Correct When Applying Online For Business Insurance Quotes

Applying for business insurance quotes online has become a simple process and many of the five million small businesses in the UK are purchasing cover this way.

It is now easy to get both business property and liability insurance quotes and buy cover online from numerous outlets including commercial insurance brokers, direct business insurance companies and business insurance price comparison sites.

Every type of business cover can be bought online if your company does not employ more than fifty employees, and even these larger cases are handled today by helplines and callback facilities.

The practice of buying cover online is particularly of interest to small business and self employed tradesman, often working from home. An hours research and comparison of business insurance quotes could save a small business a significant amount in annual premiums.

There are however sometimes major problems that arise for businesses that buy online, further down the line, if they are unfortunate enough to have to make a claim against the policy.

The majority of the problems that can delay a payment or repudiate a claim, occur because of the information about the business that was supplied or given, when first getting a business insurance quote.

It is therefore imperative when getting quotes online that the correct information about the business is supplied.

In particular clams will be questioned when the business is either misrepresented by the information supplied or there has been an alteration to the business activities which was not declared when getting the quotes.

Misrepresentation can be either deliberate to avoid paying additional premiums or unintentional, however neither is an excuse and will be penalised.

Deliberate misrepresentation is for example a builder applying for builders liability insurance quotes,who uses heat and works at height but who declares he only works on single storey extensions. Another example would be a company applying for employers liability who only declare half of the workforce.

Unintentional misrepresentation is far more common but can still lead to disappointment when making a claim.

Get your sums insured right

The most common mistake made by business men and women when applying for business insurance cover online, is to declare the value of property at a level less than its true worth. This could apply to declared sums insured for commercial buildings and or contents insurance.

If the declared value of the sums insured is less than market value or the cost of re-instatement, whichever is applicable to a particular policy, then the claim will be subject to what insurance companies call ‘Average’. All properties will be subject to average if the market is inflationary and prices have risen over the period of the contract.

Average is applied to a claim and is a means by which the insurance company will reduce its liabilities. Average assume that the businessman will cover the loss for the difference between the declared sum insured and the true value and will reduce the claim amount proportionally.

Claims will also be repudiated and denied where it is found out that their has been an alteration to the original cover described at the quote stag which later went on to form the policy contract. For example if a motor trader has not declared that he also runs a taxi business with the same vehicles in the evenings for hire and reward.

To avoid disappointment and ensure that your business is properly covered be prepared with the correct and most up to date information about your business, when applying online for business insurance quotes.

When applying for business insurance quotes online it makes sense to use a company that can either offer fixed levels of cover so that you know that your business falls within these, or provide additional help and advice from an expert or broker on the phone.

At UK Commercial Ltd. you can compare business insurance quotes online from multiple suppliers who offer various levels of cover so that you can avoid losing out to average, at a claim.

With so many new products and markets for modern risks emerging, knowing what business insurance cover is available online has become increasingly difficult with more choice.
Insurance Blog asked the insuranceblogger to investigate:-

Commercial Insurance Distribution Channels on the Internet

If you worked for a UK Insurance company just twenty years ago or anywhere else in the world for that matter, you would not have heard the term Internet distribution channel, except perhaps in the idle chat of the IT department boffins and analysts in the company cafeteria.

There were only two main distribution channels, or ways of moving insurance products to the market and the Internet as a serious sales and marketing contender would have to wait another ten years to appear.

At the time, the main channels were the direct channel, which meant producing insurance products that could be sold directly to the public from a call centre, thereby cutting out the costs and expense of managing a middleman, and the broker or intermediary channel.

The broker channel was further sub-divided into insurance brokers, agents, tied agents, consultants, sub-brokers, managing agents for Lloyds and the affinity corporate market.

Both channels offered different propositions for the same products dependent upon the way a policy was sold.

At the time only personal lines insurance products such as car and home insurance were available via the direct channel.

It was also considered that commercial insurance and business insurance were too complicated a product to sell direct over the phone, would take up too much time and would require a bank of approved underwriters with scripts to man the phone lines, as no commercial insurance autoquote systems existed. Consequently nearly all commercial insurance was sold via the intermediary channel.

This dual path situation for the sales, marketing and deliverance of insurance polices continued until Insurance finally became a product that could be bought and sold on the Internet. The earliest offerings around the turn of the Century were for personal lines insurance and there was barely a mention of Commercial insurance, save for the odd contact us button.

Ironically as personal lines insurance developed over the Noughties and became a much larger channel of distribution, the two previous direct and broker channels re-established themselves online, this time in much closer competition.

However both the insurance companies and the insurance intermediaries were caught napping as a new distribution channel emerged on the Internet; the aggregator or price comparison site, and in record time accounted for over 90% of online Internet insurance sales.

The public love to compare prices and the fact that most personal lines products could autoquote without the intervention of an underwriter, meant they could all be aggregated into an online insurance price comparison site, such as we see everywhere in the media today. This is a testament to the comparison sites success as a channel in its own right.

Commercial Insurance in the meantime was still in its infancy as a channel on the Internet, until very recently.

The inertia was mainly due to the reluctance of the large general insurance companies to standardise and autoquote for commercial products. They felt the risk was too high and underwriters resisted the change.

The change came about by market forces as the Broker channel started to sell commercial products using its own web-enabled back office systems.

This meant that online business insurance brokers could collect information about a businesses insurance requirements on a website form, and pass the data to its internal systems. These back office comparison systems are composed of a panel of insurers and providers that provided autoquotes.

Straight through processing to an insurance company could be carried out by the existing EDI or electronic data interchange mechanism.

The single broker business and commercial propositions soon became the target of the price aggregators and the large and now very rich comparison sites, who started to offer online insurance comparisons using broker panels in 2009, which rapidly became popular with small business.

The large composite commercial insurers were forced to respond and last year released a string of autoquote products into the Internet channel including packages for shops, offices, pubs, commercial let property, tradesman, professionals and commercial liability to name just a few.

The fact that it is nigh on impossible to watch television for more than an hour or two today, without seeing an advert for a builders public liability and tools policy from a dotcom is proof that the Internet has finally arrived as a commercial insurance distribution channel.

Commercial Insurance online is available from UK Commercial Insurance. The UK brokers operate one of the largest commercial insurance quotes comparison sites on the Internet.

Abiding by the Landlord and Tenant Act 1985

The act states who is legally responsible for repair and maintenance areas within the property, even down to the responsibility of a blocked sink. And, abiding by this act goes above and beyond your business insurance policy and lettings agreement. This would also include regular maintenance checks; ensuring all electrical systems are in a safe condition and meeting IEE wiring certificate regulations, as well as the annual servicing of the boiler.

Finding tenants

Finding suitable tenants to occupy your property is obviously a priority to get cash flowing in. This is also particularly important as many insurers will not provide cover unless you have a tenant in the property. The type of tenant could also effect your insurance; some providers won’t insure your property if it is let to students for example. It is also advisable to check references from previous landlords, and credit check new tenants.

Whilst you can advertise your property in local newspapers or even shop windows, there are a number of benefits of using a lettings agent. Not only can they make the process quicker and easier, they will also advise you on the terms of the contract, financial aspects of the letting process and other legal issues. This does come at a price though (usually a percentage of your monthly rental income).

Getting the right insurance

Once you have found your tenants, you’ll need to make sure your investment is protected through an insurance policy that covers your needs. It’s important to understand the cover that comes as standard and the benefits of optional extras that can be added so that the policy is tailored to your specific needs.

Generally speaking, material damage cover is included in most policies and covers loss or damage to your property from a number of hazards such as fire, lightning, flood, water damage from a burst tank or pipe and even accidental damage.
Property owner’s liability also comes as standard within most policies and covers costs that you may be legally liable to pay if anyone suffers an accidental injury or their belongings are damaged in connection with your ownership of the property.
If rain leaked through the ceiling and damaged the tenant’s television for example, and you were found liable for not maintaining the property, then the property owners liability aspect of the policy may cover a claim made to repair or replace your tenant’s television.

Of course, accidents can happen which are out of your control. But to provide you with peace of mind, accidental damage cover within your insurance policy could help protect your asset. More unusual benefits are offered by some insurers too, helping to cover your investment in a range of situations. Cover against theft or accidental damage to the property by the tenant(s) is one example.

Finally, if there are any changes to the property such as new tenants, or an upgrade to your fixtures and fittings, you will need to tell your insurer. If you fail to keep your policy up to date, the cover may become invalid.

The pigs have been found guilty of attempting to defraud an unnamed UK household  insurance company out of thousands of pounds and bearing false witness and committing perjury in the recent trial of Mr Wolf, who the pigs had been telling porky pies about. The pigs lies were sniffed out when claims farmers smelt a rat. The rat later confessed to fixing the insurance sting for the pigs.

Justice Fox described the pigs defence as ‘ham’.  He said “Pigs who make false claims put up the cost of insurance for all of us. The pigs will be sentenced at a later date. Insurance Blog hopes they fry!

Follow the best non-insurance insurance story this year at http://www.guardian.co.uk

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.