Admiral splices mainbrace as profits rise

26/08/2009

A curse and a pox on yon scurvy recession, sputtered salt-encrusted motor insurer Admiral this week. If it weren’t for a flood of claims shipped amidst the roiling of the current economic storm, the Admiral wouldn’t have had to hoist premium rates five and one half percentage points to make an honest living.

Unfurling its latest results for the first half of the year, the old sea dog revealed a 5% rise in profits swelled by rising car insurance premiums – which, in the wake of this year’s 5.5% rise, are now 8% higher than a year ago. Time to break out the grog, then.

Scanning the seas ahead, the Admiral spied a further 6% rates increase over the coming half year. The increased costs of sailing with the Admiral don’t seem to be harming recruitment though. Without any recourse to press-ganging, an additional 17% have come aboard, boosting turnover to £540m.

A report from consulting firm Watson Wyatt, meanwhile, suggests the UK private motor insurance industry’s underwriting loss in 2008 was more than double that reported to the FSA.

UK insurance companies reported an underwriting loss of only £493m last year. WW reckon actual losses were far worse but were disguised using past years’ reserves.

Senior consultant Ryan Warren said: “These insurers have tried to bolster their results by releasing money from their reserves, therefore disguising the actual underlying performance of the business. By removing these reserves and allocating them to the year they actually come from, we were able to identify and better understand the true underlying profitability of the market.”

WW conclude that the 2008 result was slightly better than the underwriting loss of over £1.1bn in 2007 and represented a break in a continuous trend of losses since 2004 – the only profitable year in the past decade, when the market made a profit of £77m.

RW said slightly improved results last year were due to a reduction in the number of claims, a slight increase in rates, and the restructuring of reinsurance programmes leading to savings in reinsurance spend. However many still struggled to break even last year.”

The firm predicted a return to profitability next year, with projected underwriting losses falling from the current 15% of earned premiums to 6%, with a 2% per annum return on capital after allowing for investment returns.


23/07/2009

Back to Defaqto’s bumpy ride report (quoted last week) again for this nugget of an insight. Motor insurance is confusing. Has someone had this thought before?

Consumers are apparently bewildered, perplexed, baffled and mystified by a choice of 140 insurers offering more than 200 different policies. But in case you thought comparison sites might be the answer – as some of them purport to be. Defaqto say no! More aggregators, it claims, will make it worse.

Mike Powell, Defunqto’s principal consultant for general insurance, puts this in his own words: “The motor insurance market provides so much choice for the consumer that it can be very confusing when choosing an insurance provider.

“Online comparison and research sites are becoming more popular with confused consumers. But the ever increasing number of aggregator sites could just add to all of the confusion.”

Oh dear!

Powell says the best way for consumers cut through the chaos is to focus on the policy features that are important to their own circumstances.

Wouldn’t it be good is someone like Defaqto came along with some kind of consumer-friendly comparison site of their own that helped punters cut through all this confusion by focusing squarely on policy features?


16/07/2009

The RAC’s 2009 Report on Motoring published this week reveals disturbing evidence of drug-crazed driving on the roads of Britain.

One in four young drivers, it reports, have been in a car when the driver “appeared to be high on drugs” (although it’s a safe bet they probably didn’t use precisely that phrase).

Not content with driving under the influence of top gear, 25% of 17 to 24-year-olds are also busy texting at the wheel‚ potentially, statistics suggested – more dangerous than driving drunk or stoned.

The good news is that young drivers are less likely to drive drunk. With only 24% of young people admitting to driving while potentially over the limit, compared to 32% of the 45-64 age group.

Commenting on concerns over bibulous older drivers, The Glasgow Herald has an intriguing headline on its website: Older Drivers Flaunt Drink Laws.

This brings to mind visions of lairy senior citizens hanging out of speeding cars provocatively waving copies of booze-related legislation.

Bankstone News was unable to verify the details, however, as the paper’s website was down this morning ‚ probably after a riotous office party the night before.

16/07/2009

Defaqto’s newly published report  Motor Insurance 2009: Another Bumpy Ride’ predicts another bumpy ride for motor insurers in 2009.

Whatever else it may portend, the fact-finding firm warns motor underwriters, that faint light ahead does not indicate the end of the tunnel.

Despite evidence that rates have moved upwards, there will be no underwriting profits from UK motor business in 2009, Defaqto bluntly states.

Defaqto ‚ whose name, fact fans, is a corruption of a Latin term de facto meaning roughly  in fact’ or  actually’ (legalistically opposed to de jure meaning  by right’ or literally  of law’)‚ believes the 8.7% rise in average premiums falls pitifully short of the 20% rise required to restore motor underwriting to profitability.

Mike Powell, Principal Consultant for General Insurance, has some advice for motor insurers: “Motor insurers are going to need to think carefully about choosing to write for profit or market share,” he claims. “They are not going to be able to do both.

“Even in the commercial motor market,” he continues, “where there has been consistent profitability for the past few years, profitability is on a knife edge.”

A bumpy ride on a knife edge certainly doesn’t sound good.

15/07/2009

Just months after being deemed surplus to requirements at beleaguered fleet owner Helphire, Chris Chatterton has been drafted back as group sales director.

The return of Chatterton, who was previously managing director of Helphire UK and Angel Assistance, has prompted a rash of speculation.

Sadly, Bankstone News has nothing in the way of fact with which to anoint said rash and thereby soothe the irritation. Some things never change.

According to the official blurb, Chatterton will be responsible for sales and business development within all of Helphire Group’s entities including, Helphire UK, Albany Assistance, Helphire Automotive Division, Total Accident Management, Cab Aid, E-claim and Fleet Legal.

Martin Ward, Group Managing Director, said: I very much look forward to working closely with Chris as we forge ahead with our programme of recovery. Chris’ appointment to Group Sales Director is designed to maximise the Group’s presence in all of its markets and ensure that there is no conflict between channels.”

Perhaps amidst all that right-sizing, they’d forgotten the need to do some selling. Maybe it’s a knowing where the bodies are buried’ thing. Maybe they just missed having him around. Fruitless‚ and indeed potentially libellous‚ to speculate. So we won’t.


08/07/2009

Don’t come at the Admiral from astern! The nautical but nice car insurer is not amused by the rising tide of rear-end collisions on the UK’s roads‚ nor by the suspicious tide of whiplash injuries in their wake.

The 420,000 head to tail collisions on our roads each year account for a quarter of all RTAs, costing the insurance industry half a billion pounds in the process. And with the trend heading only one way, 2009 looks set to be another bumper Year of the Rear.

Commenting on the fact that rear-end collisions have failed to follow the UK’s overall declining trend in accident frequencies, Admiral ventures the suggestion that drivers may be paying insufficient attention to the road ahead.

One in ten of these rear-end accidents results in whiplash claims from vehicle occupants, Admiral says. Whiplash claims alone‚ many of which the insurer suspects may be fraudulent, cost the industry £1.9 billion a year and account for 75 per cent of all personal injury claims.

“Pull up to my bumper, baby,” urged scary popstress Grace Jones in her 1981 hit of that name, “in your long black limousine.”

Wonder if she ever got whiplash.


25/06/2009

Traditionally seen as unlucky and accident prone, green cars are suddenly in vogue – though not necessarily green coloured ones.

Cars of that hue are the equal-second-most-likely to have accidents‚ tied with black, just behind brown – according to research carried out by the University of Auckland in New Zealand in the early Noughties, which also found silver and white the least likely to crash‚ but we digress!

No indeed, the green cars in question are the environmentally friendly ones currently being promoted by politicians, transport activists and municipal authorities up and down the land‚ and specifically the electric and hybrid ones.

Monkeysupermarket.com, that reliable stand-by source when trumped-up car insurance stories are hard to find elsewhere, has proven beyond all statistical doubt that 39% of motorists would buy a hybrid or electric vehicle, if buying one they were.

More startling still is the accompanying revelation that the motor insurance premium for a green car is typically “similar to a standard car” or, to put it more precisely, similar to the insurance premium for a standard car. Can it really be only October last year when the same moneysupermarket.com were telling us “eco-friendly car insurance can cost over 105% more than standard cover”?

Thirty-three of the 39% green-leaners cited above would opt for the hybrid, and just 6% for a full-on plug-in. Meanwhile 36% of UK motorists would not even consider purchasing either, with the remaining 21% not knowing, not caring, or both.

Insurance for an eco-friendly vehicle is similar in price to a standard petrol car, moneysupermeerkat.com claims, but “eco-friendly Brits can make savings elsewhere as hybrid and electric cars qualify for reduced or even zero road tax.”

Sweeney Steve, their head of motor insurance says: ” Aside from the obvious environmental benefits, [green cars] are also incredibly cost effective for the owner. Those driving a car such as the Honda Insight Hybrid would only pay £35 in road tax per year due to its low emissions [compared with] around £120 for standard petrol cars. The G-Wizz would not even qualify for road tax as it does not emit any harmful CO2 pollutants.”

The survey found Londoners and South Westerners most receptive to verdure, with 48 and 49 per cent respectively saying they’d opt for a hybrid or electric car.

This may not be altogether unrelated to green cars’ exemption from the congestion charging scheme in force in London, where Major Bozzer Jozzer recently outlined plans to set up thousands of vehicle charging points across the city and‚ perhaps revealing wider political ambitions‚ to make Britain the “electric car capital of Europe”.

London currently has 100 electric vehicle charging points in roads and car parks‚ a figure expected to rise to 250 by the end of 2010.

Bo Jo now plans to have 25,000 charging points by 2015, serving 100,000 vehicles. There will be both “slow charging points” allowing cars to be refuelled overnight and industrial-strength “rapid charging points” at petrol stations.

Moneysuppermarket.com also found younger people far more eco-car-inclined that older ones ‚ with almost half of 20-somethings saying they would go green. Young uns are more evangelistic on the subject too, suggesting that running your car on petrol could soon be about as socially acceptable as drink driving.

For previous coverage on electric vehicles in Bankstone News – and a lovely picture of a crouching BJ – we dare you to click here.


25/06/2009

Brits are cutting back on their insurance spending in an attempt to save money. Or so say Sainsbury’s Finance.

Their latest press statement suggests that nearly 950,000 UK residents have either given up or cut their home contents insurance, whilst another 700,000 have reduced or stopped payments for their buildings protection.

Nearly 600,000 have reduced their car insurance, and over half a million have dropped their life insurance policies to pay “more important bills.”

Sainsbury’s home insurance manager, Neil Laird, warned (a little late for some) that reducing or axing insurance cover could have “serious financial consequences – were anything to go wrong.”

To see how the situation has moved on since we last “covered” this story in April, click here.

11/06/2009

For some reason insurers seem to believe that fleet managers‚ like foreigners‚ must be spoken to very loudly and very clearly.

The latest example of mildly patronising if doubtless well-intentioned guidance for the fleet fraternity come from Aviva who revealed last week that:

“Fleet drivers can speed up the insurance claims process if they gather information at the scene of an accident.”

Aviva technical motor claims manager Martin Smith is a compassionate and empathetic individual, albeit one with a patchy knowledge of comparative adverbs.

“Even minor accidents can be inconvenient and distressing for drivers,” he acknowledges humanely, “but capturing the right information at the scene will enable their insurers to determine responsibility quicker and reduce the length of the claim for all parties.”

The question of how it might reduce the length of the claim for some parties but not for others need not detain us here.

Making a note of the exact time and location of the incident and “what happened” are described as helpful, as are records of witnesses’ or third parties’ versions of events.

“But,” Smith cautions winding himself up for a brutally split infinitive, “we do urge drivers to avoid becoming involved in conversations about who was to blame and to never admit liability.”

Perhaps most pertinently in the current climate of PI fraudstership, Smith advocates that fleet driver should note whether “any person involved is physically injured or is complaining of pain or discomfort.”

“This can be useful,” he suggests, “in helping to avoid any fraudulent claims such as staged accidents which are an increasing problem.”


15/05/2009

The ‘Help’ bit of its name sounds ever more urgently plaintive as accident management firm Helphire attempts to extract monies owed by insurers and offload its over-large fleet.

The company claims it is owed more than £279m by “certain insurers.” Modest progress is apparently being made in hastening the collection of the monies owed.

Helphire is also aiming to reduce its fleet by 2,000 odd vehicles to cut £10m in costs, offering Insurance Times the lukewarm affirmation that “We have demonstrated in recent months that we can effectively implement the changes needed to create a better quality business and to respond to very difficult trading conditions.”

Meanwhile the accident management restructuring story continues with Helphire promoting Susan Howe, previously head of ops at Albany to group ops director, and calling Jason Tripp, previously Helphire UK ops director, strategic ops director.

See previous story.


« Newer PostsOlder Posts »

What our clients say about us

Telephone was answered quickly. The agent on the line was knowledgeable and efficient and polite. If have nothing but good things to say.
Mr. R - Hook