Another week, yet more correspondence from those of you outraged about soaring insurance premiums.
Dennis Favish, a 74-year-old retired finance director from Stanmore in Middlesex, wants to know whether the renewal premium he recently received for cover on his townhouse represents a record.
Insurer Esure wanted to increase the annual premium from £216.54 to £693.15, a 220 per cent hike. This is despite an exemplary no-claims record going back at least ten years.
Although Dennis complained, Esure wasn’t for moving. Instead, he shopped around (as all people should do at renewal) and bought equivalent cover from the Co-op for £308, a gentler increase – but still a stiff one – of 42 per cent.
What Dennis found unfathomable was Esure’s explanation for the price hike: changing weather patterns.
Safe as houses: Insurer Esure wanted to increase Dennis Favish’s annual premium from £216.54 to £693.15, a 220 per cent hike
‘There is nothing particularly unusual about Stanmore’s weather,’ he told me last week. ‘We’re not prone to floods and Stanmore is one of the highest points in London. I’m baffled.’ So am I.
David Jones, from Norwich in Norfolk, has just received the renewal notice for his home insurance from Swinton – a premium increase of 148 per cent. Swinton, which selects cover from a panel of insurers, has told David that the best cover it can find for his three-bedroom home costs £1,137 – via Highway Insurance.
Says David mischievously: ‘It seems to have missed the word robbery out of its title. Insurance is currently like the Wild West with little chance of a return to fair pricing – and both the Government and the financial regulators are powerless to act.’
For the record, Highway Insurance is a brand owned by Liverpool Victoria – and no other insurer has been the butt of more reader complaints over premium pricing than LV. Suffice to say, David opted not to be robbed – and shopped around for cover costing half what Swinton offered.
The final word goes to 96-year-old John Southern, from Wigan in Lancashire. He now uses his second-hand Suzuki Swift sparingly, averaging 30 miles a week to go to church, attend choir practice, do a bit of shopping, dine with friends and see his GP. He has always insured with LV, his last claim being in 1977. The reward for his loyalty?
A renewal premium of £1,014, compared to £678 last year. Although he negotiated the price down to below £970, it still means a 43 per cent increase. What price loyalty, eh?
If your renewal premium jumped by more than 220 per cent, do let me know – if only to make Dennis feel slightly less victimised.
Email [email protected] or drop me a line at 9 Derry Street, London W8 5HY.
There’s a place for Barry – but NOT when it’s customer service
Insurance giant Zurich UK has introduced ’empathy’ training for staff who deal with customers making a claim on a financial protection product. Such policies typically provide a payout if a customer is diagnosed with a serious illness such as cancer.
It’s a splendid initiative, designed to ensure customers are treated with respect when feeling vulnerable and stressed about a recent medical diagnosis.
‘Our customers expect a high level of service,’ says Zurich’s Pete Sanderson, head of retail protection operations.
A time and a place: Telephone queries are being met with Barry Manilow belting out Can’t Smile Without You
‘It’s important we’re there for them at their time of need, both emotionally and practically.’
Although empathy is key in this area of finance, it should be a given irrespective of which company is delivering the customer service – an insurer, bank, train company or utility provider.
Sadly, too many companies have lost the plot in this area, turning customer service into a nightmare experience.
For example, telephone queries being met with Barry Manilow belting out Can’t Smile Without You (there is a time and place for Barry, but not when you want a problem fixed asap).
Or a train being cancelled one minute before it is due to arrive at a station without any announcement of apology or explaining why (it happened to me last Monday).
Less of Barry and more empathy.
St James’s should bite the bullet
Wealth manager St James’s Place is not a FTSE 100-listed company because it gives clients buckets of tender loving care. It’s there because it is good at attracting clients, charges them a lot for looking after their wealth, and makes profits (£162 million in the first half of this year).
Yet the company is in remodelling mode. Last week, in response to new consumer duty rules (from the Financial Conduct Authority) requiring companies to give customers value for money, St James’s said it would overhaul charges. As a result, its controversial early exit penalties would be scrapped.
Fine and dandy? Yes, but as SCM Direct’s Alan Miller pointed out last week, its move is not that consumer-friendly. Existing clients will still be subject to these charges which can be as high as 6 per cent. Only new clients joining from late 2025 will be immune from them.
St James’s should bite the bullet, bin exit penalties for ALL clients, and move on.
Will £230m be enough to ease woes of Woodford?
Fallen: Fund manager Neil Woodford
Nearly four-and-a-half years have elapsed since investment fund Woodford Equity Income, run by fallen fund manager Neil Woodford hit the buffers. This is after the £3.7 billion fund was unable to meet investor requests to withdraw their money because of the illiquidity of its assets.
Although the 300,000 investors caught up in this monumental investment debacle have since received a series of payments as assets in the closed fund have been sold, most nurse losses.
They should therefore be heartened (in theory at least) by news that they are being asked to vote on a scheme that could push up to £230 million of compensation their way. Not enough to cover all their losses, but a big step in the right direction.
The payment is being made by Link Fund Solutions, the fund’s supervisor, which failed in its duty to look after the financial interests of investors. Its lackadaisical approach meant the fund became more a portfolio of illiquid assets than shares in dividend-friendly UK companies.
For the money to come the way of investors, two hurdles must be cleared. Of those who vote, a majority must say yes by number and 75 per cent by value of their fund investment. Investors will be able to vote until early December.
While City regulator, the Financial Conduct Authority, insists that the settlement offers Woodford investors a better outcome than could be achieved by other means (for example, a class action), not everyone agrees.
Campaign group the Transparency Task Force, believes investors are being railroaded into approving the deal, without being told properly about other options available.
They are also concerned that many investors may be excluded from voting as a result of investment platforms failing to contact them – or deciding to vote on their behalf.
Alan Miller, co-founder of investment house SCM Direct, believes Woodford investors face a Hobson’s choice. He says: ‘Although the deal presented to investors will not fully compensate their losses, it will probably pass because the alternative is a lengthy legal battle with no guarantee of victory.’
As for others involved in this awful investment episode – Hargreaves Lansdown (promoter of the Woodford fund until the day it was suspended); the regulator; and, of course, Mr Woodford himself – they have so far escaped any form of censure.
THIS IS MONEY PODCAST
This post first appeared on Dailymail.co.uk
