Unemployment Insurance - An Election Safety Net?
The past week of electioneering and the unemployment figures released midweek by the Office of National Statistics, paint a gloomy future for many currently employed in the Public Sector and jobs that rely on Government Funding.
Whatever the outcome of the General Election on May 6th, there is risk in all the policies pursued and in the unlikely event of the Conservative Party winning an overall majority, six billion pounds of spending cuts would put thousands of public sector, particularly those in the health service, jobs at risk.
We are currently in the trough of the deepest recession since the Conservatives led us into the Thatcher generated trough of the early Eighites, and the Boom Bust Major recession of the early Nineties.
Recessions are basically measured by the level of output of a nation, it's Gross Domestic Product or GDP. Output is of course affected by demand which in turn is controlled by Government and monetary policy. When output falls we are in a recession.
The difference with the current recession is that it is not a result of a mismanaged economy or poor government strategy as with previous Conservative led recessions, moreover it is the result of a collapse of a mismanaged global banking system.
The above graph demonstrates that although we are in the deepest output recession since the 1930's, unemployment has remained relatively low up until now. This is because the current recession is a credit led recesssion where demand has been as artificially curtailed by the banking system as it was as artificially created for the housing market. Overall the state of the economy was fairly healthy!
The graph also shows that the effects of quantitive easing are working in keeping employment stable and the difference between the current stable levels of unemployment and those suffered under Thatcher in the 1980's is the difference in levels that we should expect if the Conservatives are returned to power in May.
And who is going to pay for all this unecessary unemployment?
There is no North Sea oil revenue to squander on dole queues like under Thatcher, and no new information revolution coming to help as happened to Major!
Furthermore, the largest national debt in history created by the policies of quantitive easing, is not a sinkhole to be used as a political football.
Where has all the money gone?
Quite simply into the coffers of Northern Rock, Lloyds TSB Bank of Scotland and RBS to keep them afloat.
I for one am sick to death of hearing about job cuts and job taxes when it's quite clear that it should be the Banks paying back the money they've borrowed and not profiteering off of the futures of Government bonds used to bail THEM out!
A hung parliament, the most likely outcome, will surely exacerbate the underlying trends in unemployment and it would be very prudent if you work for the Government, Civil Service, Armed Forces or Health Sector to get some private unemployment insurance in place now before the cuts start happening.
Unemployment Insurance is simple to purchase online, just enter your age and the amount of cover you want to get a quote; and it will provide you with peace of mind and protect your family, income and lifestyle for a few pounds per month, no matter which colour is flying over Whitehall in May!
Labels: Banks, credit crunch, Debt, Economy, recession, redundancy insurance, UK government, unemployment, unemployment insurance
Car Insurance and Motor Insurance premiums reach record levels
UK Car Insurance premiums reach record levels!
Well we knew our car insurance premium were always on the up but the results of the latest AA British Insurance Premium Index reveal that rates have actually reached an all time high.
In the final quarter of the year the average car insurance premium for an annual comprehensive car insurance policy increased by a whopping 7.2% on the previous quarter. In real terms this meant that the average premium is now priced at around £1,000.00 per year.
On an annual basis the percentage increase was 18.7% for comprehensive insurance. This is the largest increase in this area of business since the records first began back in 1994. Meanwhile the average premium for third party fire and theft increased in the same period by 8.9% to £1,252.00. Annually third party fire and theft rose by 23.8%.
The increases have come as auto insurers have desperately struggled to make up for a lack of reserves which have slowly been exhausted during the economic downturn. Other factors such as steep rises in settlement costs and an increase in the frequency of personal injury claims can also be attributed to the sociological effects of the recession and are also driving the premiums sky high.
The report has been released at a time that most composite insurers are either actively increasing rates or at least discussing it, but the strategies are varied and diverse.
Zurich have taken the impulsive decision to implement a blanket rate increase on its private motor book, a bold move which has certainly caught the market off guard. The Swiss insurer announced it intended to push forward with sharp increases in personal lines motor expected to be in the region of 20% in the broker channel.
Head of personal lines at Zurich's broker division, Mark Coffey said: "We have not aimed our increases at specific brokers or segments of the market - they are right across the piece. The majority of the increase will come in March and the remainder will follow in April.”
He concluded "It is an industry problem - not specific to Zurich - so I will be intrigued to see how other insurers react."
And they were queuing up to respond too…
An Aviva spokesperson commented that "no plans for blanket motor premium increases". And added that “Aviva's motor pricing strategy is still tailored to the individual - we seek to recognise better risks with more competitive pricing,"
A spokesperson for
Car Insurance comparison website Car-Insurance.tv said, “ We’ve been predicting this for a long time now – the underwriting Insurance Companies can’t keep running on a loss and eating claims reserves ad infinitum.”
Meanwhile both Allianz and Axa indicated prior to Zurich’s move that they will be taking some form of corrective action also.
Gareth McChesney, head of pricing and reporting at Allianz Retail, said: "We applied some strength to our ratings in 2009. It seems others in the market are realising the severity of the situation - just six months later than we did."
"In Q4 last year, the market started to correct itself and in 2010 I would expect to see that continue, certainly for the first half of the year. Zurich has put forward a hefty increase in a single month while the market is adopting slightly smaller increases, say 3-3.5%, every month to come up to an acceptable rating level," he added.
Inevitable yes? Necessary pretty much? Helpful as we come out of recession? I let you answer that! From the pen of Insurance Blogger Kris Oldland.
Labels: auto insurance, car insurance, car insurance premiums, motor insurance, UK Car Insurance
Insurance Leads The Way To Global Economic Recovery
UK Insurance Regulation: Geneva report suggests Insurance leads the way in rebuilding the economy
A report by the Geneva Association published this week has indicated that Insurers and Reinsurers are likely to play a mammoth part in rebuilding and restructuring the faltering global economy.
The report
‘Systemic Risk in Insurance’ has required the international think tank - which largely focuses on the insurance industry, to analyse the role of insurance in financial stability.
It would seem that the report is designed with the clear goal of raising awareness of the industry’s need to no longer be shoehorned in with other financial sectors, such as the much maligned banking sector.
It will certainly go some way to ensuring the industries voice is heard in key debates across Europe and globally, discussing how to move forward from what many fear could be the worst recession in living memory.
Highlighting the very different roles that the Insurance and Banking sectors occupy the report accurately concluded that the core activities of insurers and reinsurers posed no systemic risks due to the very nature of the industry.
The report also called upon supervisors and policy makers to now focus their attention on activities and not financial institutions whenever new regulation is introduced.
It is key factors such as; strong operating cash flows without the requirement of wholesale funding, the long term nature of insurance policies and the relative steady capacity business volumes and prices during the financial crisis which have led to the report showing our industry in such a positive light.
Using the definition of systemic risk as defined by the Financial Stability Board and applying it to the core activities of
UK Insurance and Reinsurance, the report concluded that these are simply not relevant to the sector.
It was also concluded that insolvency is less of a danger to insurers as it naturally develops at a relatively slow pace meaning it can often be absorbed. Strength of the sector is the interrelationships of insurance activities means that the exposure to contagion risk is also limited.
In yet another marketing coup, Aviva hosted the presentation of the report’s recommendations, firmly associating themselves with this upbeat report.
CEO, Andrew Moss commented that “The insurance industry with its strong cash flows and well funded customer contracts is a source of stability in the financial system. These recommendations will enhance the regulatory framework, strengthen consumer protection and support the industry's capacity to provide investment to the real economy."
Meanwhile the rest of the industry has also greeted the report’s findings with the Chartered Institute of Insurance (CII) claiming the report builds on their calls for a ‘pragmatic approach’ to regulation. To be fair they have been beating this drum for quite a while now and it is a very valid point they make.
Clearly glad of some solid support in this crusade David Thomson, director of policy at the CII, went straight on the offence warning the government to be “mindful of introducing sweeping regulatory changes simply to sate the thirst of public retribution over the financial crisis.”
The CII has been pushing for the UK Government to take a far more cautious and considered approach to regulation which
Insurance Blog thinks most of us would commend. However the question remains whether either of the ‘would be governments’ we have in waiting would be brave enough to not radically change the system?
Our feeling is that whoever comes in will want to be seen to be doing something, even if they don’t fully understand what it is they are doing themselves.
Yes the financial system failed – but how much of that was due to the insurance sector? And don't forget Insurance is currently underwriting all the Government debt around the World and already leading the road to recovery by supporting the Governments policy of Quantitive Easing - or bailing out the banks as it is otherwise known!
Do we really need a radical overhaul when perhaps just a few tweaks might be enough? May 6th may play a large role in this decision!
Thomson is fully prepared to admit that there will be failures but is keen to stress that “regulatory regime is there to try to ensure that there aren't too many [failures] to undermine confidence in the system or the markets. “
It is this type of realistic and responsible approach that needs to reach the next government whether it is red or blue. Hopefully the growing strength of conviction now backed up by irrefutable hard cold facts of the Geneva Report can prove enough for finally the voice of the insurance industry to be heard.
We can but hope.
Labels: credit crunch, Geneva Report, Insurance, Quantitative Easing, recession, UK Election, UK government, UK Insurance
Van Insurance - Stalking White Van Man is taking over the UK!
You either love them or like me, hate them, but there is no denying that you can't avoid them!
They are Everywhere and You can't escape from Them!
I'm talking about the unique UK phenomena of 'White Van Man', that you will be stuck behind on every road and see parked with reckless abandon on every street corner thoughout the length and breadth of the country.
Insurance Blogger shouldn't really knock them as the 'old man' slaved away for years at the home of the Ford Transit in Swaythling Southampton, and it's an acknowledgement of 'Great British Design' that the Transit is still one of the biggest 'culprits' today!
But Why White?
Well when I was a kid the black van man was always a 'copper'!
Anyway, largely because of the Internet and local delviery, they are out there on our roads and they are dangerous, especially the stalking subset called Cowboy Builders from Barling Essex; so we had better insure them right?
We've been looking around at what's available for White Van Man and have found that the best deal to be had online
Van Insurance at the current time is through Direct Line and is not available on comparison websites.
It's just been launched as a standalone product on
Car Insurance Television........
Van Insurance Deals as Direct Line launches at Car Insurance Television
Car Insurance Television announce the launch of Direct Line Van Insurance who are offering a weeks free cover for the next month. Join in the celebrations today and get much cheaper van insurance instantly online.
FOR IMMEDIATE RELEASE
PR Log (Press Release) – Apr 01, 2010 – "We are pleased to announce that Direct Line van insurance has launched at Car Insurance Television and to celebrate are offering 1 day’s worth of free insurance every week. The offer lasts until 30th June 2010."
Car-Insurance.TV chose Direct line van insurance because it offers a very competitive van insurance product and provides the following benefits;
Replacement hire van available for up to 21 days following an accident or claim (If you purchase Guaranteed Hire Car Plus. Comprehensive cover required)
No charge for any extra for business use if you are the only driver.
With a Direct Line van insurance policy, you get an extra discount on every additional vehicle you insure with us.
Vandalism cover that preserves your No Claims Discount is standard (Comprehensive cover required)
If you're hit by an uninsured driver we'll cover your excess and your no claims discount won't be affected.
Direct Line van insurance customers who buy online also receive the following discounts:
Home insurance: 10%off
Breakdown cover: 25% off
You can find out more about Direct line business
Van Insurance where you can take advantage of the latrest special offers and purchase all your cover online in an instant. Full Tools and Liability covers are available online.
Labels: american classic car insurance, Business Van Insurance, Commercial Van Insurance, Direct Line, Van Insurance
Marine Insurance Counts the Cost of Increased Attacks by Pirates!
Unbelievably Marine Piracy continued to grow in 2009, which should be a sobering thought for all us sea dogs who like to roam the seven seas.
The ICC International Maritime Bureau’s Piracy Reporting Centre (IMB PRC) has just released it’s 2009 annual report and it makes bleak reading for insurance loss adjusters and
marine insurance actuaries trying to set rates for 2010.
Piracy and armed robbery incidents topped 400 in 2009.
Incredibly in these days of satellite surveillance and Type 45 Destroyers, incidents of Marine Piracy have grown from 239 in 2006 to 406 in 2009.
The total number of incidents attributed to the Somali pirates stands at 217 with 47 vessels hijacked and 867 crew members taken hostage.
Somalia accounts for more than half of the 2009 figures, with the attacks continuing to remain opportunistic in nature, with small high speed outboard land based vessels being used to pick off a certain type of easy target.
So what precautions against pirates are being taken?
All shipping and vessels in the gulf are required to transit the Somali coast in convoy with a minimum speed of 10 knots with absolutely no stops or slowing.
It is recommended to protect the boat with razor wire around the freeboard or the the lowest area of the deck.
Greased or electrified handrails have been used although the vessel owners are encouraged to use non-lethal deterrents to prevent the situations escalating.
Vessels that regularly transit the area even resort to welding doors shut and welding metal plates across windows. The return of the Iron Clads!
It's quite obvious that America doesn't want to get involved in the region after the Blackhawk incident, however it's Insurance Blogger opinion that until very stern measures are taken against the major perpetrators, these attacks will continue and continue; and the cost of freight insurance and
boat insurance will rise and rise......
Meanwhile........
British Hostages
Paul and Rachel Chandler, taken by Somalia Pirates, are spending their 159th day in captivity!
Hey Gordon Brown!
How about this for some political capital this Easter.......
NEWS FLASH!!!
We interrupt the Snooker final for a message from Prime Minister Gordon Brown..
" It is with great pleasure that I have to tell you that this morning a team of our finest Royal Marine Commandos, successfully carried out a mission to rescue Mr and Mrs Chandler. There were no British Casualties......"
Labels: boat insurance, Cargo insurance, freight insurance, global risks, Marine Cargo insurance, Marine insurance, Ship Insurance, small boat insurance, Yacht Insurance
Post Budget Blues or Pre Election Reds - Playing Risk with Your Future!
So Alisdair Darling delivered his pre-election budget to a crowd of disinterested Brits yesterday and effectively opened the floodgates for the six week marathon of Polls, Accusations, Taunts, Cajolery, Calumny and Political Bollocks that culminates with you putting your X in the box of damage limitation and patting yourself on the back for being Democratic. (Especially if you are from an extremist party such as the BNP)
So what are the
choices?
Hmm - A pompous inexperienced public school prat of the Harry Enfield mold with zero social conscience or a one eyed Scot with questionable religious motives whose already been given the chance to 'change' things and failed miserably in some quarters!
Yep, I can hear you all shouting that there are other choices, but my yellow friends you are kidding yourselves. I want you to all return to your constituencies and prepare not to govern!
This is a straight Two horse race like it or not - although it may, like the pathetic Lib/Lab pact of the Seventies not decide the outcome at the first hurdle.
In fact with all these Tory created Strikes and Industrial actions leading up to the election I keep getting flashbacks that I'm in 1979.... God help us all....
So today unpolitical but always controversial Insurance Blogger, nails his colours firmly to the mast and asks you the British people.....
NOT TO VOTE FOR CHANGE !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Why?
Because in case you haven't noticed the UK Economy is on the brink of slipping back into recession.
The Interest Rates need to be kept as close to zero for at least another five years if the Japanese Economy recovery experience of the Nineties is to be followed.
A Conservative Government would naturally interfere with Interest Rates and the Bank of England monetary policies.
The Conservative party simply cannot be trusted not to inflate the rates to protect their own and their core voters savings!
Look what happened to the UK the last time they were allowed to Govern!
Lest we forget that quickly?
SELLING ENGLAND BY THE POUND
The Bank of England who along with the major European Insurance Companies, are currently doing a mighty fine job of managing UK Debt.
Insurance Companies can't buy enough UK Government debt in the shape of gilts!
The last offering of UK debt this month was 3 times oversubscribed as the
Insurance Illuminati rushed to defend Britain!
It looks like the UK Government are managing the debt pretty soundly!
Truth is, where else do you put your money? Greece? The Euro??
So if Insurance Companies (who BTW own everything including the banks) have faith in the Status Quo - - then So do I!
A vote for Cuckoo Cameron would be utter Madness. Cuckoo BTW because he hasn't got any policies of his own!
Answers, objections and biased opinions in the comment box below please!
XLabels: Bank of England, Cuckoo Cameron, David Cameron, General Election, Gordon Brown, Quantitative Easing, UK government
Insurance Companies Blame 2009 Losses on Personal Accident & Bodily Injury Claims
We recently heard that rising Personal Accident and Personal Bodily Injury Claims were pushing up the prices of
Car Insurance premiums, now as the major UK Insurance Companies take stock of 2009 with the final quarter results, it appears that rising bodily injury claims and an unusually kind hurricane season were the two biggest factors in the 2009 results published to date.
There has been a mixed bag of results in the insurance world this week as a variety of insurance companies have announced how they have fared across the last year.
One of the biggest impacts on the industry was the phenomenal upsurge in the rising cost of bodily injury claims - partly as a result of the recession and partly due to the increase in claims farmers.
Kris Oldland gives Insurance Blog a roundup of the 2009
UK Insurance results so far..........
The insurance arm of part nationalised bank Royal Bank Scotland was heavily hit with profits collapsing by 90% with £448m reserves being set aside for bodily injury (BI) claims.
The group which includes Direct Line, Churchill, Privilege and NIG – posted a drop in net income from £584m in 2008 to £54m last year. Chief executive Paul Geddes claimed that considering their size and risk exposure, 2009 was always likely to be a tough year saying that being “twice as big as anybody else, when the market sneezes we catch a cold.”
Of course many of the major operators within the personal lines market were hit particularly badly by the rising cost in BI claims although RSA managed to reduce the damage to just £30m by taking early action to counter the rising costs.
UK Chief Exec Adrian Brown admitted that “The hit to our result is fairly small compared with some of the other numbers being thrown around.”
He added “When it comes to bodily injury costs, you have to be massively up to date on claims; they are one of the things you have to watch like hell when you are cutting expenses and headcount.”
Another company that felt the impact of rising personal injury claims was the
specialist car insurance company Equity Red Star who had a strong full-year profit of A$113m eroded away by bodily injury claims. Insurance Australia group (IAG) who own the company put a statement to market that read “A lower margin of 6.6% reflected reserve strengthening for prior-year bodily injury claims and weaker investment returns, both of which have been felt across the UK industry.”
Meanwhile Allianz have grown their operating profit in the last year by 5% climbing to £203m in the last year while the combined ration improved from 95.2% to 92.9% despite the obviously tough trading conditions.
A large part of the success has been down to Allianz’s hard line stance on driving rate rises of 24%. Chief executive Andrew Torrance predicted more of the same in 2010 commenting that “It remains a priority for in 2010 to increase premium rates to a level that provides an adequate return on the cost of capital.”
Other insurers posting impressive results for 2009 were Amlin and Hiscox who both had strong years due in large to the reasonably benign hurricane season.
Amlin were able to post combined operating ratio improvement from 76% to 72% although their results were padded out slightly by £174.1m in reserve releases whilst Hiscox insurer tripled profits before tax from £105.2m to £320.6m, in what chairman Robert Hiscox described as a “vintage” year.
Another Lloyd’s insurer to triple profits in 2009 thanks to the kind hand dealt by mother nature last year was Brit who increased profits to £171m although an uplift in investment returns of £137.4m last year from £7.4m in 2008 certainly would of helped also.
........So it looks like a lot of people will be seeking big bonuses?
Labels: insurance news, Insurance Profits, UK Insurance, UK Insurance Market
