Been anywhere nice for your holidays this year?
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24-Aug-16
Hopefully, the only thing you have to show for it are some great snaps and maybe a few dodgy tan lines. But what if your holiday was marred with something much worse than poor photography skills and ill-advised swimwear? What if your well-earned break was ruined by events totally out of your control?
The risk of terror related tragedies is, sadly, something we all now have to live with but, seemingly, apart from not booking your annuals to a war zone, we can only pray that it is not a horror that we will ever actually have to confront - who would ever have thought that mass murder would be something inflicted on a beautiful city like Nice? Unless you’re a government agent charged with thwarting such horrors, you could never be expected to foresee such an eventuality.
We all know that insurance is about risk. Adrenaline junkies deserve the higher premiums, but where was the increased risk in travelling to the French coast last month, to join in the revelry of a family centred celebration? What could possibly go wrong? The heart-breaking scenes transmitted around the world - when a large truck ploughed through the Bastille Day crowd, mowing down innocent families who had simply gathered to watch the fireworks - is an all to painful demonstration that sometimes things do go horribly wrong; and you can only do so much to protect yourself.
And then again, nature will always play its part in creating mayhem, resulting in the tragic loss of life. As the death toll rises in Italy following the massive earthquake last night, the locals and holidays makers alike relay terrifying eyewitness accounts as it is revealed how four towns were almost wiped off the map in just a matter of seconds. The last earthquake of this magnitude was in 1980: Campania and Basilicata, southern Italy, suffered a quake that was 6.5 in magnitude which claimed the lives of 2,735 people and left 394,000 people homeless. Whilst Italy and Sicily are no strangers to these disasters, what realistically can they do to avoid the disastrous consequences?
But what of those who court just a little danger, a bit of fun, with only a soupcon of daring required? The sun is out and you’re lying on the beach watching the jet skis flying past and you think to yourself ‘I’ve always wanted to do that’ - the group of teenagers skimming the water until they part company with a yellow inflatable, or the father and son act who take to the skies towed by a handsome local at the wheel of a speeding boat. Countless groups go out and come back. It all seems safe enough. Doesn’t it?
Last week a friend of mine went paragliding with his daughter in Turkey. A late turn from the driver of the boat saw both slam into a cliff face, leaving the pair with substantial and horrific injuries. Worse still – if there could be anything worse - the entire devastating scene was witnessed by the rest of the family sitting in the boat below – you can only imagine the family’s pain. Both the victims have multiple lacerations and fractures, but in particular, the female, aged 25, suffered a broken back. She’s had one operation already, but still has at least 2 more to go. The medical bill alone currently stands at £16,000 and is rising steadily. All this was followed by more bad news - they are not insured. They had standard travel insurance, but this did not include paragliding, which comes under the banner of ‘dangerous sports.’ The younger children are now on their way home, but the injured parties and next of kin remain, for what will no doubt turn into a lengthy and costly period.
Apparently, a staggering 48% of 15 to 24 year olds still go on holiday without insurance, and a mystifying 24% of adults don’t bother to get cover either. So why don’t they?
Seemingly, some 16% of travellers still believe that the British Government will cover the cost of medical treatment aboard, which is simply not the case. Statistics show that misconceptions about the European Health Insurance Card (EHIC) may be partly to blame. Whilst having a card entitles you to treatment in EU member countries, it only entitles you to essential medical care to the same level as locals in that area.
Things will change again post Brexit, but as the current system stands, the EHIC will NOT cover repatriation to the UK, it will NOT cover the cost of an ambulance, and in EU countries where there is no National Health Service, you will still be expected to pay what the locals pay to see a medical professional.
Last season, nearly 4,000 British holiday makers were hospitalised abroad. Although some of these were insured, nearly half were unaware that without it, they were entirely responsible for their own medical bills. Also, when asked, 78% of those injured did not have the means to pay for the costs of their medical care abroad without cover.
It is estimated that a fall resulting in a broken bone or a minor operation, along with missed flights and other incidentals, in somewhere like Spain, could easily incur a bill of £20,000 plus. Go further afield, like the Unites States for example, and the numbers quickly become frightening. If you don’t have the cash to pay the bills, it would undoubtedly result in the loss of precious assets back home to fund your care. Or, potentially, the refusal or withdrawal of treatment.
Whether it is paragliding, jet skiing or bungee jumping, we are getting more adventurous when on holiday. But still only half of us will check if our travel insurance covers an accident before embarking on such an activity and, even more worryingly, even if we found out it didn’t, we would be quite likely to just go ahead and have a go anyway.
A quick straw poll conducted round the Aston Charles office confirms this. Like doctors who smoke, we know the risks but do it anyway. Whether it is the Government or insurance companies, or maybe even an opportunity for a JV, a campaign of awareness is clearly necessary. Like car insurance, perhaps it should even be made compulsory? To recruit such a policy is a win win for all – increased sales with the added bonus of safeguarding our UK citizens.
The cost of travel insurance is a drop in the ocean compared to footing a hefty medical bill abroad. You can’t always mitigate the risk, or the dangers of the event itself, but you can do much to ensure that any eventualities as a result are covered. And even with insurance, don’t assume you’re covered for every flight of fancy that takes you. It is very much as they say; ‘act in haste and repent at your leisure’.
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- 01/07/2024
- Insurance Specific Employee Health & Wellbeing Opportunity
Our exciting new collaboration – Insurance Specific Employee Health & Wellbeing OpportunityEmployee health and wellbeing is a massively important subject, and it’s great to see so many of our insurance clients taking this so seriously.To us, it’s a bit of a no-brainer; a happier, healthier team will lead to – Increased productivity Minimal lost hours to sickness Talent acquisition & staff retention A work force of high energy, company ambassadors that are engaged with your goals But where do you start? Not all firms have the time or budget to roll out their own inhouse programme, and let's face it - employee surveys may not be as honest if you know the person who is responsible for your pay review is going to be reading it!So, we’ve teamed up with the lovely Lisa Kempster, who may many of you know – she enjoyed a successful career as an insurance recruiter prior to setting up her own Health & Well being practice. Lisa’s got over 15 years’ experience of partnering with insurance businesses so understands the challenges of the job, the industry, along with the importance of return on your investment. To top that off, Lisa is partnering as a Consultant with West Yorkshire Business Boost, so you may be able to claim back 50% of the cost of your programme, regardless of where you are based (broker clients – you’ll be glad to know she won’t be adding VAT to your invoice either)!...- 01/07/2024
- Cryptocurrency: A Wealth of Opportunity for the Insurance Market
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- Aston Charles Sponsors Insurance Institute of Leeds 134rd Annual Dinner
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- Aston Charles hosts a charity insurance Darts evening
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- The Insurance Industry: Reacting to a Disrupted Market
The Insurance Industry: Reacting to a Disrupted MarketAs the insurance sector surveys the landscape for 2024 and beyond, there are a number of changes in sight. New technology, extreme events and changing cultures are all shifting the way Property and Casualty insurance needs to operate. Some of these new factors create opportunities, while others create risks; many offer both.Responding to market disruption is nothing new for P&C insurance. While the specific factors may be unprecedented, the insurance sector has always been at the forefront of predicting and responding to new risks.In this article we will look at some of the key elements that are changing (or are set to change) the industry within the next few years.Artificial IntelligenceIt is impossible to discuss disruptive markets without talking about AI. Artificial Intelligence has been on the scene for a few years now, but as it continues to develop, it brings about innovation and opportunity, while also creating risk, uncertainty, and potential problems. Almost all industries need to adapt to a world where AI is commonplace.AI offers massive opportunity to the insurance industry. It can reduce risk, increase speed and refine processes across the board. AI can interact with clients in a more supportive way than ever, meeting their requirements and even anticipating their needs in a way that has not been possible before. At the same time, lots of clients struggle with the impersonal nature of AI – although this is improving all the time, as it becomes more adept at mimicking human emotional responses. Of course, there are dangers that come with computer learned behaviours. One recognised risk is that AI is vulnerable to using data to inadvertently create an illegal or unethical bias – for example, a bias against a protected group. This could result in fines and legal sanctioning, as well as a significant loss of trust in the methods being used by the industry. As this is already a recognised risk, ...- 16/04/2024
- Insurance Costs Rising with Flood Risks: How Can Brokers Help?
Insurance Costs Rising with Flood Risks: How Can Brokers Help?2023 recorded a record home insurance price increase. Consultants, Pearson Ham stated that the cost of building and contents cover went up by 40% from 2022 to 2023.[i] This is quite a blow for already financially stretched homeowners as they try to cope with the cost-of-living crisis.When people purchase insurance, they want to know that they are getting a product that is protecting them, while also being value for money. Doubtless, they will be questioning why there has been such a swift rise – especially for those individuals who have not made any claims. Insurance brokers are uniquely placed to help policy buyers understand what is happening in terms of their home insurance, while making sure that they have an insurance policy in place that meets their needs. Why the price rises?Price rises have been happening across all areas of insurance for a variety of reasons. One of the major causes of the price increase for building and contents insurance is down to the vast expenses associated with a rise in freak weather incidents over recent years. In the United Kingdom, this is often related to storms and flooding.Sadly, flooding has become a regular issue for homeowners in many parts of the UK. The Environment Agency put the number of homes at risk of flooding at 5.2 million in England alone.[ii] This number will be rising all the time. Average insurance claims in the aftermath of flooding are £48,551 for houses and £11,489 for contents. Following the storms of October and November 2023, a massive £352 million was paid out by insurers.[iii]These costs do, of course, have to be passed onto the policyholders to allow insurance to remain viable. Reassuring clientsLots of insurance customers are understandably anxious about the rises in home insurance costs, as well as rises in excess charges and worries about under insurance. What can brokers do to ease the concerns of their clients, while making sure that ...- 27/02/2024
- The MGA Model: Reliable or Redundant?
The MGA Model: Reliable or Redundant? Placing over 10% of the UK’s insurance premiums, Managing General Agents have become a fixture of insurance in this country. While MGAs enjoyed a number of years of expansion through recent decades, over the past three years, they have seen a small amount of decline. Some companies may be questioning whether use of MGAs is still a business model that works as we move forwards into 2024. Are there more opportunities for the future of MGAs, or is it time to move on and look at different models?What are MGA’s?MGAs are insurance agents, authorised by insurers to carry out a variety of roles such as underwriting and negotiating contracts on behalf of that insurer. They may also be involved in settling claims or appointing brokers. They work within parameters agreed with the insurer.[i]The partnership between insurers and MGAs can be a very beneficial one. MGAs tend to have specific strengths in their field of expertise, and they can offer insights into particular markets that large insurers may not be able to access as efficiently. Meanwhile, the large insurers can offer capital, flexibility and resources that maximise the insurance offerings for clients and the profitability of the programme. [ii]Is the model declining?Although it is acknowledged that there are lots of benefits to the MGA model, the past three years has seen their growth declining. Insurance DataLab revealed the preliminary findings of its 2022 MGA performance report exclusively in Insurance Times, rating the performance of MGAs based on their financial performance. It showed that while 2020 saw an average growth score of 53.8%, this decreased to 51.6% and 49.4% in 2021 and 2022 respectively. [iii]While this will be of concern to those investing in and managing the MGAs, at the same time it’s important to recognise that the past three years is not a neutral sample to analyse. The insurance industry has had a very challenging few years across the board. ...- 21/11/2023
- The Risks and Rewards of Investing in Insurance
The Risks and Rewards of Investing in InsuranceFor a number of years, investing in the insurance sector was a (relatively speaking) safe bet in the stock market. While not paying huge dividends, investors tended to have confidence that their investments would grow; after all, insurance is entirely necessary for almost every business and individual, regardless of what is happening in the wider economy.However, in recent years, a number of factors have seen some drops in profits, making investors question whether insurance stocks still hold the same low risk benefits as they did before.*A guide to insurance wealthInsurance companies make their money in two ways.1) Insuring businesses and individuals for unforeseen events. The hope is that losses will not occur and then the insurance company will make a profit. This is the underwriting profit.2) Money that is paid in by policyholders is known as a float, and insurance companies invest this float until it is needed to pay a claim. This is most usually invested in low-risk stocks and bonds. [i]The risksInsurance companies face a double risk at the moment. Firstly, world events over recent years have created an unstable environment for Underwriters to assess. Property and Casualty insurance has had an unprecedented number of claims. Secondly, the current economic downturn has meant that investments have not been as profitable as hoped.Car insurance has probably been one of the worst hit sectors of the insurance industry. Since the end of the travel restrictions brought about by Covid, there have been an increased number of car accidents, pushing up the number of claims. At the same time, an increase in the cost of parts and labour means that cost per claim payout has been increasing. In 2022, the car insurance sector announced a net combined ratio (NCR) of 109.5% - the poorest figure in a decade. The NCR denotes the cost of claims as a percentage of premiums, ...- 16/10/2023
- The High Price of Synthetic ID Fraud during a Cost-of-Living Crisis
Fraud is on the rise worldwide. In the UK the National Fraud Intelligence Bureau recorded 17% more fraud related crimes in the year ending March 2022 than the same period the previous year. [i] Fraud can affect most industries, with the insurance sector being no exception. The rise in insurance fraud is costing insurance companies huge amounts of money and time. With the current cost of living crisis and many clients already struggling to make ends meet, this is the worst time to be passing the cost of fraud on to customers.Some statistics suggest that in a massive 85% of insurance fraud cases, the cause can be traced back to synthetic ID fraud. [ii] If synthetic ID fraud can be dealt with effectively, it will vastly reduce the cost of fraudulent activity to insurance groups and the clients they serve.Types of ID fraudID fraud has long been an issue for businesses and individuals to contend with. In the past, ID was simply stolen and then used directly to open accounts or steal money. In this type of identity theft, there is a clearly identifiable “victim” who is likely, once aware of the issue, to log the crime and alert companies to the fraudulent activity taking place. In the case of insurance companies, they could then refuse pay outs and cancel policies.However, the advance of technology has led to identity fraud becoming more and more complex, with the birth of synthetic ID fraud. Unlike with stolen IDs, these synthetic identities may have no single “victim” meaning that there might never be a crime recorded, so it can be very difficult to identify that a crime has taken place. Synthetic ID can come in different formats. In manipulated synthetics, a genuine ID may be modified in the favour of an individual person. In the case of insurance applications, they may moderate their own identity details in an effort to make themselves look lower risk and therefore be given a lower policy price.Manufactured synthetics involves criminals building entirely ...- 11/09/2023
- Can a Career in Insurance Appeal to the Next Generation of Our Workforce?
Can a Career in Insurance Appeal to the Next Generation of Our Workforce?Sadly, the insurance industry appears to have developed a reputation for being old fashioned, or boring. We asked a Generation Z child their opinion about working in the insurance industry. She said “it sounds like one of those jobs that I just associate with boredom. I picture falling asleep at a desk.” Where has this perspective come from? How can the insurance industry make themselves appealing and relevant to the workforce of the next generation?Do young people want to work in insurance?Our interviewee is not alone in her opinions as a young person. It appears that this attitude may persist through childhood into being a young adult, judging by the unfortunately low number of people in their 20s and 30s currently looking at insurance as a career. A study by ACORD showed that only 4% of millennials (born between 1981 – 1997) would think about working in the insurance sector. This is concerning, given that millennials are likely to be 75% of the UK workforce by 2025. [i]Of course, in 2023, as we look towards the future of insurance, we are not only talking about recruiting millennials, who are now aged 25 plus and may be already on a chosen career path. Now is the time to start appealing to Generation Z (born approx. 1997 – 2012) and then Generation Alpha (born 2013 onwards). A new generationRecruiting young people into careers in insurance is vital to the general insurance sector. Not only are they needed for future numbers, as previous generations look to retirement, but their ideas and skills are needed now. Generation Z are the first generation that grew up from childhood with social media as a normal way of communicating. They have seen huge growth of technology and a lot of political and economic upheaval. They lived formative years through the Covid epidemic, with all the complexities that brought. All this makes generation Z an adaptable, technologically-adept generation, with ...