Yesterday's news that the UK government is on the verge of announcing a £1.5 billion compensation package for those who lost money in the Equitable Life collapse has taken 13 years to come through. It is believed that £1 billion will be made available immediately with a further £500 million put aside to cover those who lost money on with-profits investment. But why has it taken 13 years for this compensation package to be confirmed?
A report by the AA has confirmed a massive increase in car insurance premiums in the UK over the last 12 months. The report shows that comprehensive car cover has increased in cost by 11.5% over the last 12 months although there has been a massive 57% increase in the cost of premiums for third party, fire and theft arrangements. Younger drivers are bearing the brunt as you might expect although the increase in general car insurance premiums is very confusing to say the least.
The UK banking community, backed by the British Bankers Association, has applied to the High Court for a judicial review of the PPI rules, which were set to come in on 1 December. These are rules produced by the FSA (Financial Services Authority) in relation to payment protection insurance and more importantly an industry wide review of past arrangements even if there has been no complaint from the underlying customer.
Lloyd's of London, the largest insurance market in the world, has today reported a slump in first-half profits from £1.3 billion in the same period last year to £628 million. It seems a number of catastrophes have come together to create another nightmare scenario with the Chilean earthquake, BP oil disaster and a number of other issues coming to the fore.
Tesco Bank has this week confirmed a deal with insurance giant Fortis UK which will see Tesco travel insurance transacted through the Fortis UK network. It is believed that the travel operation of Tesco Bank has around 170,000 customers each year with gross premiums estimated at around £59 million. It is unclear what kind of profit each party will take from the agreement but this would appear to be the next stage of previous agreements on motor and household insurance.
A survey by the Which? magazine has today highlighted administration fees being charged by some car insurance and home insurance companies which can be as high as £55 for relatively minor alterations. The report suggests that while some alterations to insurance policies, or insurance records, may see insurance underwriters themselves passing on small fees, this is not always the case.
A report by Cardiff University has today hit the headlines with a suggestion last over 200 lives a year could be saved, as well as 1700 fewer serious injuries, if young drivers between the ages of 17 and 19 are restricted from driving at night. There are also calls for younger drivers to be banned from carrying young passengers with statistics showing that males under the age of 21 are 10 times more likely to die on the road than any other group of drivers and account for one third of dangerous driving prosecutions.
Chris Wiscarson, the chief executive of Equitable Life, has today stepped into the mix with regards to the ongoing compensation claim being handled by the UK government. It is believed that customers lost in the region of £4 billion - £4.8 billion when Equitable Life was forced to renege on a number of promises on some of its investments. However, the chief executive of the Equitable Life believes that a figure of around £2 billion would be "great start" in relation to compensation.
The embers of the former financial giant in the UK, Equitable Life, have been well and truly doused but there is still much anger with regards to the 1.5 million people who were impacted by the company's inability to cover its future liabilities. The company nearly collapsed after losing a court case during which it attempted to reduce liabilities but failed. However, it is estimated that a large number of the 1.5 million people impacted by the company's inability to cover its liabilities are of pension age.
Equitable Life is again back in the headlines with news that a number of pensioners who suffered enormous losses when the company effectively reneged on policy payments are to approach the UK government about an increased compensation program. The Equitable Members Action Group will write to various ministers in the coalition government to demand an increase in the rumoured £500 million compensation payment being discussed, with some estimates putting overall losses at nearer £5 billion.
