Another week, more correspondence from those of you outraged by rising 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 to cover his townhouse is a record.
Insurer Esure wanted to increase the annual premium from £216.54 to £693.15, an increase of 220 percent. This despite an exemplary no-claims record going back at least ten years.
Safe as a house: Insurer Esure wanted to increase Dennis Favish’s annual premium from £216.54 to £693.15, an increase of 220 percent
Although Dennis complained, Esure was not in favor of a move. Instead, he shopped around (as all people should do at renewal) and bought equivalent cover from the Co-op for £308, a milder increase – but still a hefty one – of 42 per cent.
What Dennis found unfathomable was Esure’s explanation for the price increase: changing weather patterns.
“There’s nothing special about the weather in Stanmore,” he told me last week. ‘We are not prone to flooding and Stanmore is one of the highest points in London. I’m stunned.’ Me, too.
David Jones, from Norwich, Norfolk, has just received his home insurance renewal notice from Swinton – a 148 per cent premium increase. Swinton, who selects cover from a panel of insurers, has told David that the best cover he can find for his three-bedroom home costs £1,137 – through Highway Insurance.
David says mischievously, “Looks like the word robbery has disappeared from the title. Insurance currently resembles the Wild West, with little chance of a return to fair prices – and both the government and financial regulators powerless to act.”
For the record, Highway Insurance is a brand owned by Liverpool Victoria – and no other insurer is the target of more reader complaints about premium pricing than LV.
Suffice it to say, David chose not to get robbed – and went looking for cover that cost half of 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, run some errands, dine with friends and visit his doctor. He has always been insured with LV, his last claim dates from 1977.
The reward for his loyalty? A renewal premium of £1,014, compared to £678 last year. Although he has negotiated the price down to under £970, this still represents a 43 per cent increase. What price loyalty, eh?
If your renewal premium has increased by more than 220 percent, please let me know – if only to make Dennis feel a little less of a victim.
Email jeff.prestridge@mailonsunday.co.uk or message me at 9 Derry Street, London W8 5HY.
A Time and a Place: Phone questions are answered with Barry Manilow releasing Can’t Smile Without You
There is a place for Barry, but NOT when it comes to customer service
Insurance giant Zurich UK has introduced ’empathy’ training for staff dealing with customers making a claim on a financial protection product. Such policies typically offer a payout if a customer is diagnosed with a serious illness such as cancer.
It’s a wonderful initiative, designed to ensure that customers are treated with respect when they feel vulnerable and stressed about a recent medical diagnosis.
“Our customers expect a high level of service,” said Zurich-based head of retail protection operations Pete Sanderson.
‘It is important that we are there for them in their time of need, both emotionally and practically.’
While empathy is critical in this area of finance, it should be a given no matter which company provides the customer service: an insurer, bank, train company or utility company.
Unfortunately, too many companies have lost the thread in this area, making customer service a nightmare experience.
For example, phone questions where Barry Manilow exclaims Can’t Smile Without You (there is a time and place for Barry, but not when you want a problem solved as quickly as possible).
Or a train canceled a minute before arriving at a station without any announcement of apology or explanation why (it happened to me last Monday).
Less Barry and more empathy.
St James’s should bite the bullet
Asset manager St James’s Place is not a FTSE 100 listed company because it provides a lot of tender loving care to its clients. I
It’s there because it’s good at attracting customers, charging them a lot to manage their assets, and making a profit (£162m in the first half of this year).
Still, the company is in rebuilding mode. Last week, in response to new consumer rights rules (from the Financial Conduct Authority) requiring firms to give customers value for money, St James’s said it would review charges. As a result, controversial early withdrawal penalties would be scrapped.
Neat and modern? Yes, but as SCM Direct’s Alan Miller noted last week, this move isn’t all that consumer-friendly. Existing customers will still be subject to these charges, which can be as high as 6 percent. Only new customers who join from the end of 2025 will be immune to it.
St James’s needs to bite the bullet, eliminate fines for ALL customers, and move on.
Will £230 million be enough to ease Woodford’s woes?
Fallen: Fund Manager Neil Woodford
Almost four and a half years have passed since investment fund Woodford Equity Income, led by fallen fund manager Neil Woodford, hit its buffers.
This comes after the £3.7 billion fund was unable to meet investors’ requests to withdraw their money due to the illiquidity of its assets.
Although the 300,000 investors involved in this monumental investment debacle have since received a series of payments after assets in the closed-end fund were sold, most are suffering losses.
They should therefore be encouraged (at least in theory) by the news that they are being asked to vote on a scheme that could give them up to £230 million in compensation. Not enough to cover all their losses, but a big step in the right direction.
The payment is made by Link Fund Solutions, the fund’s regulator, which has failed in its duty to represent the financial interests of investors. His lax approach made the fund more of a portfolio of illiquid assets than shares in dividend-friendly British companies.
To get the money to investors, two hurdles must be overcome. Of those who vote, a majority must say yes in terms of numbers and 75 percent in terms of the value of their fund investment. Investors can vote until early December.
While the city’s regulator, the Financial Conduct Authority, insists the settlement offers Woodford investors a better outcome than could be achieved through other means (such as a class action), not everyone agrees.
Campaign group the Transparency Task Force believes investors are being duped into approving the deal without being properly informed of other options available.
They are also concerned that many investors could be excluded from voting as a result of investment platforms not contacting them – or deciding to vote on their behalf.
Alan Miller, co-founder of investment house SCM Direct, believes investors in Woodford face a Hobson’s choice. He says: ‘While the deal presented to investors will not fully compensate their losses, it is likely to succeed as the alternative is a protracted legal battle with no guarantee of victory.’
As for others involved in this terrible investment episode: Hargreaves Lansdown (promoter of the Woodford fund until the day it was suspended); the supervisor; and of course Mr Woodford himself – they have thus far escaped any censure.
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