Insurance Companies are Going Cheap! - Recession Latest!
The recession has hit the insurance industry particularly hard and no sector has to date escaped. Aggregation has been a prominent feature of the market for a long time. Before the recession
Insurance Brokers were the main target with the number of independent providers reduced by more than half as aggressive agglomerators swooped on books of business up and down the country.
The recesssion has brought with it major troubles for large bank owned brands such as Churchill and Direct Line and it looks like RBS will finally be forced to sell it's crown jewels
Recent activity has also seen many large re-insurance companies going for a song!
However you really know the recession has hit home when you can pick up forward thinking Insurance Websites for peanuts....
Here is an Advert from this weeks
insurance news
Now that is Cheap!
Labels: acquisitions, Insurance Business for sale, Insurance companies, insurance domain names, Insurance Mergers and Acquisitions, insurance news, Insurance Websites, Internet Marketing, recession
Recession still to bottom out as UK Insurance Industry Suffers
The pundits in the housing markets often seem to be singing from a different songsheet when it comes to what's really happening in the UK economy. One minute we hear that repossessions have dropped in comparison to the first quarter of 2009, and that house prices are rising, but this is surely industry sales talk.
Fact of the matter is house prices haven't reached anything like the levels needed to stimulate a National recovery and movement in the market. Mortgages are very difficult to come by and often require up to a thirty percent deposit. Those lucky ones on tracker mortgages are praying every month that the Bank of England doesn't put up interest rates, otherwise many of them would bejoining the ranks of the reposessed!
Credit in general is non-existant, particularly in the Car Finance sector, and the credit card companies with their extortionate rates are only interested in recuoperating lending and tightening the national screw further!
Unemployment is rising and you only have to drive a short distance to see hundreds of towns that relied upon local industries that have gone to the wall, with the ranks of unemployed growing on a daily basis!
We as a Nation are in the proverbial big time, the good news is so is everybody else!
Insurance in the UK is suffering big time in many ways too. Households are cutting back on items seen as luxuries and Insurance is often perceived this way. In particular
home insurance and personal finance insurances such as income protection have seen their markets decimated.
As no mortgages are being given away and the recent furore over miselling,
mortgage protection insurance has virtually disappeared as a product to be replaced by a more encompassing lifestyle protection insurance policy.
Car insurance is in trouble too, despite the fact that it is compulsory. Many underwriters have been asking for rate rises for nearly two years but the prices have been artificially kept down by the levels of competition brought in by the Internet insurance comparison sites or aggregators as they are known. Many major players have made substantial losses in the Motor market over the last few years and many have had to cut deeply into their reserves. This cannot go on ad infinitum, and prices must harden. This will inevitably lead to many suppliers leaving the market.
As for the car scrappage scheme - did that generate demand? Yeah for a couple of thousand Hyundais built in India and imported into the UK - Sheer and utter madness!
Commercial Insurance is the one area which has obviously taken a massive reduction in premium volumes as businesses go to the wall and very few new startups enter the market.
One thing we can be sure of it's going to be a long cold winter, a change of UK Government won't make the slightest bit of difference and by the noises coming out on ABC and CBS News recently is going to kick of Stateside long before it does here!
Labels: Barack Obama, car insurance, credit crunch, Home Insurance, housing market, insurance news, misselling, recession, small business insurance, UK government, unemployment
Payment Protection is the solution to National Debt management
InsuranceBlogger was calling for an overhaul of the way the Government manages unemployment back in November last year. The recent global economic events have seen record levels of unemployment in the UK. Now one of the UK's leading experts on the cost of Unemployment and lobbyist for the prevention of the mis-selling of
Payment Protection Insurancehas stepped in with some interesting comments....
PPI Should Have Been Included in Government's Debt Management White Paper Says BurgessLast week's Government announcement that consumers are to get their own 'champion' in the form of a consumer advocate and benefit from a raft of measures to help them better manage their debts is to be applauded says Payment Protection Insurance lobbyist Sara-Ann Burgess from specialist firm Burgesses, but time will tell whether the theory works well in practice.
Braintree, Essex (
PRWEB) July 6, 2009 -- Last week's Government announcement that consumers are to get their own 'champion' in the form of a consumer advocate and benefit from a raft of measures to help them better manage their debts is to be applauded says Payment Protection Insurance lobbyist Sara-Ann Burgess from specialist firm Burgesses (http://www.burgesses.com), but time will tell whether the theory works well in practice.
In its White Paper 'A better deal for consumers - delivering real help now and change for the future' - the Government is proposing to appoint an advocate who will raise awareness of national issues and represent groups of consumers in court to help them seek compensation and refunds.
It's banning credit card cheques - blank cheques that are sent to card holders who are encouraged to use them as an alternative spending tool. These involve handling fees and contrary to credit cards, there are no interest free periods and no protection if something goes wrong.
Other debt-management measures include; preventing card providers increasing limits without their customers' consent, launching a new online credit card comparison tool, courtesy of the Financial Services Authority, assessing whether monthly card minimum repayments are too low (and so allow debts and accrued interest costs to spiral) and reviewing high cost credit providers (50% + APR) who offer credit over the doorstep or via payday loans.
There are also plans to assist people who are at risk from rogue traders - they will be supported by a team formed to tackle internet-based scams and a review of protection for consumers who pay for goods but are not delivered due to the company going into liquidation.
"All of these recommendations sound great," says Sara-Ann, "but unless the advocate has real power, he or she will not deter credit card providers from encouraging customers to plunge deeper into debt and it will probably take years to implement as there will be a consultation period."
The Government predicts its advocate will be in post early next year, but concedes the appointee will have no legal power as consultation and a new law would be needed to allow this to happen.
Sara-Ann comments: "I'm interested to see how fast the Government will tackle rogue trader issues as it's done little to address widespread mis-selling in the PPI sector for years. As a result of its sluggish response, consumers have sunk further into debt via prolific sales of single premium PPI, where the cost of the premium is included in the final loan amount and interest added onto both, complaints to the Financial Ombudsman Service have escalated, group actions are now being undertaken and providers have a free rein to increase their prices and restrict their cover.
"I wonder how long the White Paper review period will last for? The PPI sector has been under scrutiny for around four years now and the deadline for the Competition Commission's remedial measures isn't until April and October next year - some five years after the Citizens Advice Bureau first identified that features of the PPI market were seriously harming the interests of consumers."
She continues: "Given the continued failings that have been allowed to occur within the PPI sector, I'm sceptical about how effective these measures and the role of the advocate will be. I hope I'm proved wrong and sweeping changes are made to stop consumers being encouraged to spend beyond their means, but I would equally like to see greater PPI mis-selling clampdowns and more advice on how to shop around for cover."
Sara-Ann believes PPI is an effective debt prevention tool as it will repay monthly credit card bills for up to a year in the event the holder loses an income due to accident, sickness or unemployment and would have liked to see reference made to this product in the White Paper.
She concludes: "It only takes a couple of months of missed credit card payments to build up debts which is why this cover is so useful. Credit card providers should be pressurised into offering this cover free of charge to their customers or allow them to purchase at reduced rates.
"It's a shame the Government didn't consider
Payment Protection Insurance in its measures to tackle indebtedness - instead it's left to online independent providers such as
Burgesses and
British Insurance () to ensure quality cover is affordable and accessible to all. Premiums are calculated per £100 of monthly benefit and firms such as these two charge £1.90 per £100 for accident and sickness cover, £3.40 per £100 for unemployment and £3.90 per £100 for all three - well below other providers' premiums."
Anyone looking for Credit Card Payment Protection should opt for a policy that pays off all or part of the credit card debt, dependant on the amount of benefit purchased. Older-style policies tend to only pay a proportion of the total credit card bill, usually the outstanding minimum payment. "
........and while we are on the subject of Credit Cards. Lord Mandelson - please bring the extortionate rates charged by the UK banks into line with the other forms of credit in the UK. The credit card debt is stopping the so called green shoots of recovery!
Labels: income payment protection insurance, insurance news, PPI, redundancy insurance, UK government, unemployment, unemployment insurance
Norwich Union is Dead! Arriva Aviva!
The grand old lady from carrot crunching country just couldn't cut the mustard with the bosses of the Iberian sounding Aviva and will officially be given the fatal injection at midnight tonight.
As an ex-employee of GA bonus (New Zealand Insurance) do I care?
At the time of the merger / takeover Insuranceblogger had already moved on to pastures new in the city, but I had left them over thirty commercial products on their brand new AS/400 and at the time it was annoying to see the Misers from Perth (GA) and the Wastrels from Whyteleafe (CU) surrender to the much weaker brand.
What a waste of money rebranding is - shareholders must be outraged, mind you they are all at it! The necessary systems centralisation cost which has already happened obviously needs a centralised culture under the same banner - A banner for job and branch streamlining.
I thought Santander was a port in the basque country!
Labels: AVIVA, Economy, Insurance, Insurance companies, insurance marketing, insurance news, mergers, norwich union, unemployment
Tenants at risk as Landlords are repossessed
Questions have been asked in the House of Commons regarding tenants who have been paying their rent and fulfilling all their other obligations but who nonetheless find they are at risk of losing their home. What protection do they have?
We sympathise with tenants who find themselves in this position. So, what can lenders with the charge on the property do in cases where the tenant is paying their rent, but the landlord is not using this money to meet their mortgage commitments?
It seems it all depends upon what type of mortgage the landord has and the protection for tenants falls into two distinct groups, and are affected in quite different ways.
The first are those whose landlord has a buy-to-let mortgage, and these tenants are generally in a much stronger position.
The second group comprises those whose landlord has a residential mortgage. A borrower with this type of loan should seek the permission of the lender before renting out the property. Where the lender agrees, it will be bound by the tenancy agreement. That provides protection for the tenant, should the mortgage lender need to take possession of the property or appoint a receiver because the borrower stops paying the mortgage.
In some cases, however, a borrower with a residential mortgage decides to rent out the property without telling the mortgage lender, in contravention of the mortgage agreement and perhaps even fraudulently. These tenants have been disadvantaged and their tenancies put at risk through no fault of their own.
Likewise the mortgage lender. It is quite likely that neither the lender nor the tenant will even be aware of each other’s interest in the property. Both have been put in a difficult position because of the irresponsible behaviour of the borrower.
But while mortgage lenders may sympathise with tenants in this position, it is important to understand that their legal responsibility – reinforced by regulatory requirements – is to the
landlord, and not to the tenant.
The lender has an obligation to minimise arrears and get the best price possible for the property. This is likely to lead the lender to seek possession of the property quickly. In this situation, the tenant has few rights.
So how common is this problem? Recent television coverage of the issue reported it against the backdrop of 75,000 mortgage possessions this year.
The reality is, however, that only a much smaller proportion of total possessions – perhaps 4,000 this year, or around 5% of the total, according to the Department for Communities and Local Government (DCLG) – will involve residential mortgages where the lender discovers the property is occupied by tenants.
Buy-to-let mortgages
If tenants are renting from a borrower with a buy-to-let mortgage, they are in a better position. Here, the tenancy is normally binding on the lender if it needs to take enforcement action against the borrower/landlord. The tenant will have the statutory right to notice under their assured shorthold tenancy.
Instead of seeking possession, the lender may choose to appoint a receiver, who will, as far as the tenant is concerned fulfill the role of the landlord, maintaining the property and collecting the rent.
Under an assured shorthold tenancy, a tenant is entitled to the remainder of their contractual period – which is typically six months but can be longer – as notice and to a minimum of two months at the end of that period. In practice, a lender or receiver will often allow the tenant to remain beyond the notice period until rent arrears are paid off or the tenant chooses to leave.
Sometimes, a property may be sold with a sitting tenant. This is rare, however, because the lender has a responsibility to the borrower to obtain the best price for the property, which usually implies sale with vacant possession.
New Advice agency campaignA number of organisations, including Crisis, Citizens Advice, Shelter and the Chartered Institute of Housing have launched a campaign to help tenants when the mortgage lender takes enforcement action. The campaign calls for courts to be able to delay possession to allow tenants to find an alternative home.
But if there is a residential mortgage on the property, giving the tenant more time to find a new home could put the lender in conflict with the borrower, particularly if it means mortgage arrears build up and the property is eventually sold for less than would have been the case if it was marketed straight away. If the landlord had had adequate
mortgage protection insurance for commercial premises the situation would not have arisen in the first place
The campaign also calls for notices to occupiers to be made more obvious and perhaps to carry a risk warning.
Landlords Insurance is available to compare online.
Labels: credit crunch, housing market, insurance news, landlord insurance, mortgage, mortgage protection insurance
Insurance Cyber Network up for Sale
Here at Insurance Blog we love to speculate and predict outcomes, usually based on probability, for our own personal chest beating and so we can turn around after the event and say 'told you so!'
After all isn't that how Insurance operates!
But we're not averse to a bit of rumour or gossip as well especially when it could involve a lateral shift in the way Insurance is sold on the Internet, which soon will in one form or another BE for most products the only way insurance is transacted and sold!
Word has reached one of our intrepid contributors that an Insurance / Investment Company with a very large warchest has been making approaches to some of the best Internet Insurance marketing companies who run the major independent insurance directories out there in Cyberspace, with the intention of aquisition. One company is believed to be in advanced talks with a Broker Network to the purported sum of five million UK pounds
Now this is hardly surprising stuff, but it's made very interesting for two reasons.There are currently around 10 to 20 very large agglomerates of insurance brokers and underwriters and investment companies out there in the UK who have reached their current size in the UK Insurance market today through aquisition of companies and Insurance Brokers and accounts and books of Insurance business and physical businesses and buildings.
So does this mean that there are no more available smaller real-world businesses to buy and they've finally turned their attention to what is available in other distribution channels?
ORThey've looked enviously at the way that Moneysupermarket.com etc. and all the other comparison / aggregator websites dominate the Search Engines for all the major keywords in their market, and have realised that these types of cyber insurance networks could give them a platform on which to compete and maybe take advantage over the single comparison site big Google payers, for just about every niche insurance market.
If the latter is true, which I doubt their business foresight or acumen, then we would see a serious shift in the way Insurance is sold on the Internet.
A large cyber insurance network would fit many a large insurance (broker or company)network with little or no painful business integration and could be assimilated in the existing business corporate Internet structure on a transitional basis with little or no disruption to current processes. The cyber network would create hundreds of links during any assimilation which by its very process would create and pass enough page rank to compete with all those comparison sites that buy links. Very powerful stuff. It would also give a rapid ROI as many of these cybernetworks dominate the niche insurance products cyber markets and search engines.
There are currently equally, about 20 of these insurance cyber networks out there. You can easily come across their websites everywhere in all Insurance Internet niches. In many places they are managing the complete online lead generation for individual insurance companies and brokers. They are easily recognisable from their generic or keyword domain names and are often managed by small teams of so called Webmasters.
So got any ideas whose after who?
We believe we can narrow it down to possibly three candidates for the honeypot simply by looking at who dominates the google query for 'insurance directories' and niche products keyword searches.....as for the wolf...hmm we'll keep you posted if we hear anything but there are some very predatory broker networks and companies out there at the moment... so expect some big announcements soon!
Realising that Moneysupermarket and the other Insurance comparison websites that dominate the search engines front pages for keyword searches like 'Car Insurance'
each spend over
£5 million each week in Adwords and other PPC advertising perhaps £5 million for one of these internet website networks is small beer in the bigger scheme of things.
Even more worrying, especially for the niche players and the public is if the likes of MoneySupermarket.com or one of the other insurance comparison sites who retain their search engine postitions by buying lnks, see £5m as a very cheap investment indeed.
Isn't agglomeration a wonderful thing. Did you use to collect football cards when you were a kid?
Expect a goldrush!
Labels: Insurance companies, insurance marketing, insurance news, Internet Marketing
Insurance Press - magazines and papers
If you work in Insurance you'll be familiar with all the Insurance Industry magazines and papers that arrive on your desk at work or your mat at home usually on a Thursday.
There's a useful little resource online that lists all the websites of these magazines and newspapers, with all the familiar ones and a few more that we bet you didn't know about!
If you really want to keep abreast of UK, USA and Global
Insurance News you can do it on your desktop at
Insurance NewspapersLabels: insurance news
