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Think you don’t need Terrorism Insurance? Think Again!
19-Dec-19
Think you don’t need Terrorism Insurance? Think Again! Following recent tragic events in London, I’ve been thinking about the effect of terrorism on business; more specifically on SME’s and also on the insurance industry. Several of my contacts have posted on LinkedIn, pointing out that denial of access to bars, shops or places of work have bankrupted many firms (often SME’s operating on small margins) following terror incidents. This sparked my interest and I decided to do some research. Approximately 80% of businesses do not have any form of insurance against loss in the event of a terrorist attack.[i] Insurance brokers will want to ask; why are so many businesses missing out on this important aspect of their insurance cover? The fact that only around 1 in 5 businesses have terrorism insurance is concerning. Insurance specialist, James Woolerton, at Tristar Special Risks, suggests that Terrorism Insurance is bought by two types of people; the “informed and the obliged” – or in other words - those who understand how important it is, due to having a clear understanding of the risks; and those who are forced to purchase terrorism cover, for example by a mortgage provider.[ii] To get more SMEs responding to this risk, it is important that more companies join the ranks of the “informed”. What is terrorism insurance? Insurance against terrorist attacks can be difficult to define; because terrorism itself is difficult to characterize. While there are varying definitions available, it is important to remember that though the most common perception of “terrorism” is that of bombings carried out by recognised extremist groups, the description is actually far wider than that. Terrorism can include an attack by any group seeking to cause fear or disruption through violence and force in order to create change. Therefore, even situations, such as violent interruption of transport by political activists, could be considered a terrorist event. This decade has also ...

Life Insurance Industry: Is your Data Deceitful?
28-Aug-19
Life Insurance Industry: Is your Data Deceitful? With the rise of InsurTech, insurance companies have been launched into a race to incorporate technology into their strategies and services to avoid being left behind by their competitors. InsureTech has produced – among other things – the opportunity to collate vast quantities of data, opening up new revenue streams and offering access to many more potential clients. However, as legitimate technology start-ups have disrupted the insurance and financial markets, so less discerning companies have found ways to take advantage of this race for technological advancement – making money out of business clients in fraudulent ways. Life insurance companies rely heavily on having access to vast quantities of data. This information can be gathered in numerous ways – but the rise of fraudulent data (including fraudulent data that has been purchased honestly) is putting a strain on many otherwise healthy companies. In fact, statistics suggest that up to 50% of the contact details held within a life insurance company’s Customer Relationship Management (CRM) database will be uncontactable. This is costing the industry up to 75 million pounds per year.[i] Therefore, questions about the accuracy and reliability of customer data is not simply academic. It is highly significant and could make or break a life insurance company. What’s the problem? There are a number of different issues with data that a company holds in its CRM system. · Fraudulent Lead Generation - Fraudulent bots are now commonplace, meaning that clicks and enquiries are no longer guaranteed to be genuine leads. In fact, data suggests that $1 of every $3 paid for online advertising is wasted due to fraudulent information.[ii] When a company is spending money to generate contact details for people who may have an interest in the company – and then spending additional money on marketing to those individuals, it is vital ...

Machine Learning in Insurtech – a fuzzy and probably approximate science!
12-Jun-19
Machine Learning in Insurtech – a fuzzy and probably approximate science! We have looked previously at the huge opportunities provided by the rise of Insurtech within the insurance industry (https://www.astoncharles.co.uk/news/blog/insurtech-competitors-or-collaborators). Insurance companies have been notoriously slow to embrace the lucrative changes provided by the rise of technology, with 74% of leading worldwide insurers agreeing that the sector as a whole has been lagging behind in the digital revolution.[i] While Insurtech is wide and far reaching, one particularly poignant area is in the rise of Big Data and the opportunities that speedy interpretation of this can provide. A new concept? Of course, collating, organising and interpreting data to get accurate measurements of risk is by no means a new science. In fact, some 17th Century Underwriters specialised in this field, analysing statistics to quote insurance premiums for merchants and tradespeople of 1690s London. To quote Agile Risk Partners MD, @James Poole’s blog ‘The Big Data Paradox’ (https://www.linkedin.com/pulse/big-data-paradox-james-poole/) of December last year, “Lloyd's of London has got to have been one of THE VERY FIRST big data plays hasn't it?! The principle then, just as now, was that the premiums of the many, covered the claims of the few. And ‘many’ is significant here, because ‘many’ implies that underwriters were using big data as it was then, back in the 1690s!” Data is no more important now, than it was then. However, what the rise of technology has done to information, is create more and offer the potential for almost instant analysis. Statistics that took weeks to study can now be done in seconds, thanks to the rise of machine learning and Artificial Intelligence. Data scientists are now able to program computers to capture data from a vast range of different sources; from meteorological conditions, to geographical and historical data; as well as person ...

Money is Not Enough in Search for new Financial Services Talent
12-Jun-19
Money is Not Enough in Search for new Financial Services Talent A worrying trend within financial institutions indicates that bright young people are less and less inclined to enter the financial services market – with new blood tending to opt for other types of workplaces and industries. Recent statistics suggest that 65% of people would not consider working in the financial services market. There are a number of factors in play, but one of the overriding issues appears to be with the image of the sector - with almost half of young people under the impression that working in financial services is “boring.”[i] The percentage of 22 to 29-year olds with administrative jobs in financial services has dropped from 3.1% in 2011 to 2.7% in 2017. [ii] In addition, it would appear that of the 16 to 24-year-olds who have seen fit to enter the world of financial services, a huge 55% have parents who have or do work in the industry. This indicates that having a parent in financial services either encourages young people to enter the sector or gives them an edge when it comes to accessing it.[iii] This is a concerning realisation, with industry experts believing that the drop in new blood within the sector could have serious knock-on effects. The lack of interest from young people who currently have no link to financial services, means that the talent pool is becoming narrower and less diverse. There are a number of ways that new talent can be attracted into the industry. It will require some strategy and effort on the part of financial services companies but will reap dividends in terms of the future of the financial services sector. An interesting ...

Insurance Benefits as Volvo Tackles Drink Driving
17-May-19
Insurance Benefits as Volvo Tackles Drink Driving In their continued efforts to maintain a reputation for producing the safest cars in the world, Volvo have announced plans to reduce drink driving - by manufacturing cars that can detect and respond when a driver has been drinking alcohol. The cars will be designed to react to a drink driver in one of a number of ways, with the aim of making the vehicle, driver and other road users safe. In the UK an estimated 230 people were killed in accidents involving a drink driver in 2016; a number which accounts for around 13% of all road traffic fatalities in that year. Over consumption of alcohol also causes approximately 5% of all reported car accident casualties.[i] Therefore, the prospect of eradicating drink driving related injury and fatalities is enormously significant. While the devastating human cost of drink driving remains the main motivating factor behind the push to stamp out this dangerous habit, there is also a financial cost to driving under the influence of alcohol. Insurers pay out figures in the millions to cover the financial claims resulting from drink driving accidents. While many insurers have clauses that exclude pay outs to drivers who are under the influence of alcohol, the companies still remain legally obliged to cover any third-party costs; which could run into the hundreds of thousands in the event of very serious injuries. While they may attempt to recoup these costs from the driver, the reality is that in all likelihood, the insurer will remain out of pocket. For insurance companies, the financial benefits of a reduction in drink driving are huge. “Big Brother” or big benefit? The technology would not only target drivers that are drunk. The system involves cameras and sensors that will be able to assess a number of types of erratic driving. This means that other problems that cause dangerous driving; such as driving under the influence of drugs, excessive tiredness and driving while ...

Insurtech: Competitors or Collaborators?
03-Apr-19
Insurtech: Competitors or Collaborators? Just as Fintechs have disrupted the financial industry in recent years, Insurtechs are now making a very visible impact on the insurance market. Grappling with these new companies is vital to the survival of existing, traditional insurance providers. One survey suggests that as many as 74% of incumbent insurance companies accept that Insurtechs are a challenge to them. In spite of this, only 28% are looking at the possibility of partnering with these new companies, and less than 14% are involved in Insurtech programs.[i] These are worrying statistics, as a refusal to engage with these emerging technologies could spell the end for traditional incumbents. However, with foresight and a willingness to change, insurance companies can benefit from the products and services of Insurtechs, utilising them to complement, promote and extend the services that they already provide. Working with these companies is a way to not only survive the disruption caused by the rise of Insurtechs; but to grow and develop through strategic collaborations. Insurtech companies provide innovative products that are able to improve on every part of the value chain within the insurance sector. Insurtech can also help to identify and then market to gaps in the insurance market, opening up revenue streams that were not previously available. · Distribution McKinsey Panorama conducted an analysis of Insurtechs, using their own database which holds records on over 500 Insurtech companies. They suggest that 37% of Insurtechs are involved with the distribution of insurance, with 75% of these having a specific emphasis on the enabling of distribution; such as allowing easy access and simple comparison of products for consumers.[ii] This allows existing companies to promote their products and services in a marketplace that they may not otherwise have had access to. There is opportunity for companies that are ...

133% Increase in Compensation for Financial Clients
12-Mar-19
133% Increase in Compensation for Financial Clients The Financial Conduct Authority have announced plans for the Financial Ombudsman Service to increase the amount of compensation that they can demand a firm pays to a client. It is set to more than double the limit – from the current £150,000 to £350,000 in April 2019. The FCA has recently completed a consultation on the proposals. This new amount will only apply to transactions that take place from April 2019. However, they are proposing that the amount be increased to £160,000 for claims made about business that took place prior to April 2019. In addition, both limits will increase annually in line with inflation from 2020 onwards. Why the change? There are a number of reasons that the FCA believes the changes are necessary. Many clients (which includes those with pension investments) may be set to lose far more than the £150,000 that is currently the limit if an investment goes wrong. Each year, around 2,000 complaints are upheld by the FOS that are above £150,000 in value.[i] Almost 75% of these claims are between £150,000 and £350,000. [ii] Currently, the FOS can request that companies pay the complete amount but cannot enforce any amount above the £150,000. While some companies do choose to accept the larger amount and pay what is requested, this can create a discrepancy between large companies that can afford to pay the extra and smaller companies that may not. While clients can take companies to court for the larger amount, the FCA points out that many clients may be unable to afford to pursue legal action. In addition, a complex drawn out legal process may not incentivise companies to keep standards high in their interactions with clients. They believe that an easy recourse to compensation through their service is far more compelling in terms of keeping up standards.[iii] Opportunities While this increase in the limit may initially appear concerning to financial service companies, it would be ...

Three Ways that Millennials will Shape Financial Services by the Year 2030
07-Feb-19
Three Ways that Millennials will Shape Financial Services by the Year 2030 Today’s young people in their 20s and early 30s are about to have the highest spending power of any generation.[i] These are the millennials; people who reached adulthood in the early 21st century and are now approaching the height of their careers, buying houses and starting families. They entered their employment in the midst of the financial crisis and are growing up in a world full of environmental, economic and social concerns. Their voice will have a strong impact on the direction in which many industries will need to move and the financial sector is no exception. In order to stay competitive in a crowded market moving towards the year 2030, financial institutions need to ask, “What do millennials really want?” 1) Digitisation and Artificial Intelligence Over the past decade, disruptive technology has ushered in huge changes in financial services, with a move to digitisation, mobile banking, online lending and personalised marketing. There is no indication that millennials will be slowing down the rate of technological advancements. Indeed, statistics show that millennials spend an average of 25 hours a week on the internet, with one in three people in this age category making at least one weekly purchase via their computer (as well as many via smartphones)[ii]. Millennials are a generation that expects instant results. Recent years have seen the ability for an individual to make on online purchase in the morning and have it delivered in the evening. Speeding up processes and being convenient will be vital to appealing to the customers of 2030. In addition, clients will want to see an increasingly personalised service. Advances in AI are making this possible, with marketing and products being tailored to fit an individual, rather than grouping people together by demographics such as age, income or career. 2) Social responsibility ...

Are Mortgage Brokers Missing Out on Millions?
15-Aug-18
Are Mortgage Brokers Missing Out on Millions? Four Strategies for Winning the Custom of First Time Buyers Buying a house, particularly for the first time can be a daunting prospect. Credit checks, forms, and the huge variation of mortgage products and different lenders can be overwhelming. In spite of this, a mere 28 % of first time buyers intend to fund their house purchase using a mortgage found through a mortgage broker, with 46% intending to arrange their mortgage directly with the bank. However, at some point in the house purchase process, this attitude changes, with the percentages becoming 47% and 32% respectively.[i] In other words; the process of the house purchase makes many people realise the value of the mortgage broker over and above finding their own deal. This still, however, means that 53% of first time buyers are not using a broker, representing a market worth millions of pounds. There is plenty of opportunity here for mortgage brokers to win over first time buyers, saving these new customers huge sums in overly expensive mortgage deals in the process. The importance of a mortgage broker There are so many advantages in employing a mortgage broker early in the process of purchasing a property. Helping first time buyers to understand the benefits is the first step in winning their custom. · It is estimated that one third of customers do not get the cheapest mortgage available.[ii] Knowing the market well, brokers can access any new deals as they become available, as well as being able to analyse each customer’s individual circumstances and the best deal that they can get, giving clients the confidence that they are getting the most cost effective mortgage for them. · Many mortgage brokers also offer advice on the house buying process; from suggestions on paperwork, to recommendations about house surveys and insurance. This reduces the stress and worry ...

Financial Planning Services: Make it to the Top Using Seven Strategic Approaches
18-Jul-18
Financial Planning Services: Make it to the Top Using Seven Strategic Approaches A recent poll suggests that a mere 8% of people choose to get professional financial advice when making important financial decisions.[i] However, the income that professional advice can generate is in some circumstances, almost 6000% of the initial cost.[ii] These statistics indicate that many people may not be aware of the benefits of financial advice. There is huge scope for marketing financial services to a sceptical generation. The UK needs financial advisors with motivation, drive and diligence to offer helpful, unbiased advice to clients. These advisors need a personable character that can win over uncertain clients who are looking to secure a worry-free future with wise pensions and investments. The financial services sector needs the best – and for financial advisors keen to optimise their performance, asking what can be done to get to the top is a key question. Here are seven of the most important things to consider when pursuing excellence within financial services. Know your target market To get to the top it is important to identify the prospective clients that you want to work with and learn everything you can about the concerns and issues that they may have - and how to resolve those issues. Become an expert in your client’s industry field. Be visible to them, by attending networking events, conferences and trade shows. It may be helpful to work within a niche industry (or even several niche industries) as you will be able to become expert in those fields, earning a name for yourself in your specialism.[iii] Earn your client’s trust Expecting a client to trust you with a large portfolio prior to earning their trust is unrealistic. In many cases, you will need to put in considerable effort before seeing a penny from a client. Consider this an investment and work hard to evidence your usefulness to top clients. 47% of clients chose their financial advisor ...

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09/03/2020
Insurance Isn’t Boring, And Neither Are The People Who Work In It! - Paul Lawrence - High Sheriff of Yorkshire: It’s no secret that the insurance industry is competing in a ‘war for talent’ with many other professions.Ours is a dynamic sector that offers rewarding careers, but is often overlooked by those entering the workplace in favour of sectors such as Law and Finance.Eager to address this and bring new blood into the sector, we thought we’d highlight some of the fascinating characters who help make ours such a diverse, entertaining and interesting industry in which to work. First up, we meet with Paul Lawrence, MD of Lawrence Fraser Insurance Brokers. Paul is just coming to the end of his year acting as High Sheriff of West Yorkshire.Richard Jones (RJ) – Hi Paul, great to meet up this morning. I’ve seen from your Twitter account (@HighSheriffWY) how busy you are, so thanks for your time. We’ve spoken about this a couple of times, but for our readers, what exactly is the Office of High Sheriff of West Yorkshire?Paul Lawrence (PL) - The Office of High Sheriff is a Royal Appointment for 12 months and dates back to Saxon times when the HS (Shire Reeve) was responsible to the King for the maintenance of Law and Order within the Shire or County and the collection and return of Taxes due to the Crown. The HS receives no remuneration or expenses.RJ - I had no idea it was Saxon Times, think of all the people who have preceded you! What are the modern day responsibilities?PL - The High Sheriff supports the Judiciary, Police and Emergency Services in a ceremonial way, and hosts the High Court Judges that sit in Leeds & Bradford Crown Courts.RJ – You don’t see positions like this in the Evening Post ‘situations vacant’ pages, how did it come about?PL - I was asked if I would consider the role 4 years ago by the then High Sheriff.RJ - I’ve seen your ceremonial outfit. How would you describe it and do you get a special Sheriff’s badge?!PL - Male High Sheriffs wear 18th Century Court Dress with a Court Sword and Silver Buckle ...
24/02/2020
What Next for Modernisation of London’s Insurance Market?: What Next for Modernisation of London’s Insurance Market?England has long been an international capital for insurance and finance, with bespoke policies, expert brokers and competitive prices drawing consumers from around the world. The year 2014 saw Britain exporting almost 100% more insurance and long-term savings than their closest competitor, the USA.[i] Much of this thriving industry is thanks to the London insurance market. The world-renowned insurance market place, Lloyd’s of London, has been in operation since 1686. Even 330 years ago, Lloyd’s was ahead of its time, monopolising sectors of the market. Over the centuries, Lloyd’s has continued to develop in line with a changing market place, in order to stay at the forefront of the insurance industry.In spite of this worldwide success, it is no time for the London insurance sector to become complacent. In recent years, London’s global export of insurance has begun to slow down, with competition from innovative start-up companies, benefiting from lower overheads and ground-breaking technological advances.Some time ago, Lloyd’s came to the realisation that modernisation was critical if they wanted to retain their leading edge, and began to plan new changes. Seeking transformation for such a huge market place has not been an easy task.A Target Operating Model (TOM)A Target Operating Model was initiated several years ago to completely overhaul the current system. The TOM involved 48,000 professionals from the London Insurance Industry at a cost of £250 million. It aimed to boost efficiency and make London an easier place to trade for insurance professionals.[ii]Unlike older attempts to reform the industry, this TOM was expected to be more successful, due to the wide range of input. This overhaul was financed by insurance brokers as well as insurers, meaning that a wider range of the industry was on board with the modernisation. Some experts believed that the fact brokers had not fully engaged with previous ...
07/02/2020
Insurance Brokers – how proposed changes in Entrepreneurs’ Relief could affect the value you realise from your business: Insurance Brokers – how proposed changes in Entrepreneurs’ Relief could affect the value you realise from your businessWhether it was the nationals sweeping up smaller concerns, or in-house consolidation as globals streamlined a number of brands within their portfolio, 2019 was another interesting year on the M&A front for the UK insurance broking market. With persistent rumours regarding a “mega-merger” between two of the biggest global names, and the war chests of the consolidators showing no sign of running empty anytime soon, I cannot see any change of pace in M&A activity in 2020.As you’d expect, I have longstanding engagements with all the ‘usual suspects’ that have well-publicised appetites for acquisitions, but I am being increasingly asked by smaller, independent brokers who are considering making complimentary, strategic acquisitions too.A Waiting Game?With M&A market appetite showing no sign of waning, and rumours regarding increasingly generous terms, now is clearly a good time to consider realising the value in your business.Market confidence is up, and regardless of what you make of him or ‘it’, Boris’ Johnson’s overwhelming Commons majority, and our departure from Europe last Friday, has at least given us a degree of economic certainty.I do appreciate that the decision to sell, or not, is a massive one. For most Broker Principals, their business is their life’s work; they want to be sure that they are achieving the best possible terms and that longstanding clients and colleagues are going to be well-looked-after, post-sale.Broker Principals - you may well be thinking “why not hang fire?” Give it a couple of years and see what this brave new post-Brexit world brings, and then start the beauty parade of potential suitors. I fully appreciate that it is not a decision to be taken lightly. Danger Lurks!But a new downside of not acting now is potentially looming around the corner - in the shape of the Chancellor ...
19/12/2019
Think you don’t need Terrorism Insurance? Think Again!: Think you don’t need Terrorism Insurance? Think Again!Following recent tragic events in London, I’ve been thinking about the effect of terrorism on business; more specifically on SME’s and also on the insurance industry. Several of my contacts have posted on LinkedIn, pointing out that denial of access to bars, shops or places of work have bankrupted many firms (often SME’s operating on small margins) following terror incidents. This sparked my interest and I decided to do some research.Approximately 80% of businesses do not have any form of insurance against loss in the event of a terrorist attack.[i] Insurance brokers will want to ask; why are so many businesses missing out on this important aspect of their insurance cover?The fact that only around 1 in 5 businesses have terrorism insurance is concerning. Insurance specialist, James Woolerton, at Tristar Special Risks, suggests that Terrorism Insurance is bought by two types of people; the “informed and the obliged” – or in other words - those who understand how important it is, due to having a clear understanding of the risks; and those who are forced to purchase terrorism cover, for example by a mortgage provider.[ii] To get more SMEs responding to this risk, it is important that more companies join the ranks of the “informed”.What is terrorism insurance?Insurance against terrorist attacks can be difficult to define; because terrorism itself is difficult to characterize. While there are varying definitions available, it is important to remember that though the most common perception of “terrorism” is that of bombings carried out by recognised extremist groups, the description is actually far wider than that. Terrorism can include an attack by any group seeking to cause fear or disruption through violence and force in order to create change. Therefore, even situations, such as violent interruption of transport by political activists, could be considered a terrorist event. This decade has also seen a ...
28/08/2019
Life Insurance Industry: Is your Data Deceitful?: Life Insurance Industry: Is your Data Deceitful?With the rise of InsurTech, insurance companies have been launched into a race to incorporate technology into their strategies and services to avoid being left behind by their competitors. InsureTech has produced – among other things – the opportunity to collate vast quantities of data, opening up new revenue streams and offering access to many more potential clients. However, as legitimate technology start-ups have disrupted the insurance and financial markets, so less discerning companies have found ways to take advantage of this race for technological advancement – making money out of business clients in fraudulent ways. Life insurance companies rely heavily on having access to vast quantities of data. This information can be gathered in numerous ways – but the rise of fraudulent data (including fraudulent data that has been purchased honestly) is putting a strain on many otherwise healthy companies.In fact, statistics suggest that up to 50% of the contact details held within a life insurance company’s Customer Relationship Management (CRM) database will be uncontactable. This is costing the industry up to 75 million pounds per year.[i] Therefore, questions about the accuracy and reliability of customer data is not simply academic. It is highly significant and could make or break a life insurance company.What’s the problem?There are a number of different issues with data that a company holds in its CRM system.· Fraudulent Lead Generation - Fraudulent bots are now commonplace, meaning that clicks and enquiries are no longer guaranteed to be genuine leads. In fact, data suggests that $1 of every $3 paid for online advertising is wasted due to fraudulent information.[ii] When a company is spending money to generate contact details for people who may have an interest in the company – and then spending additional money on marketing to those individuals, it is vital that ...
12/06/2019
Machine Learning in Insurtech – a fuzzy and probably approximate science!: Machine Learning in Insurtech – a fuzzy and probably approximate science!We have looked previously at the huge opportunities provided by the rise of Insurtech within the insurance industry (https://www.astoncharles.co.uk/news/blog/insurtech-competitors-or-collaborators). Insurance companies have been notoriously slow to embrace the lucrative changes provided by the rise of technology, with 74% of leading worldwide insurers agreeing that the sector as a whole has been lagging behind in the digital revolution.[i]While Insurtech is wide and far reaching, one particularly poignant area is in the rise of Big Data and the opportunities that speedy interpretation of this can provide.A new concept?Of course, collating, organising and interpreting data to get accurate measurements of risk is by no means a new science. In fact, some 17th Century Underwriters specialised in this field, analysing statistics to quote insurance premiums for merchants and tradespeople of 1690s London.To quote Agile Risk Partners MD, @James Poole’s blog ‘The Big Data Paradox’ (https://www.linkedin.com/pulse/big-data-paradox-james-poole/) of December last year, “Lloyd's of London has got to have been one of THE VERY FIRST big data plays hasn't it?! The principle then, just as now, was that the premiums of the many, covered the claims of the few. And ‘many’ is significant here, because ‘many’ implies that underwriters were using big data as it was then, back in the 1690s!”Data is no more important now, than it was then. However, what the rise of technology has done to information, is create more and offer the potential for almost instant analysis. Statistics that took weeks to study can now be done in seconds, thanks to the rise of machine learning and Artificial Intelligence. Data scientists are now able to program computers to capture data from a vast range of different sources; from meteorological conditions, to geographical and historical data; as well as person specific data ...
12/06/2019
Money is Not Enough in Search for new Financial Services Talent: Money is Not Enough in Search for new Financial Services TalentA worrying trend within financial institutions indicates that bright young people are less and less inclined to enter the financial services market – with new blood tending to opt for other types of workplaces and industries. Recent statistics suggest that 65% of people would not consider working in the financial services market. There are a number of factors in play, but one of the overriding issues appears to be with the image of the sector - with almost half of young people under the impression that working in financial services is “boring.”[i]The percentage of 22 to 29-year olds with administrative jobs in financial services has dropped from 3.1% in 2011 to 2.7% in 2017. [ii]In addition, it would appear that of the 16 to 24-year-olds who have seen fit to enter the world of financial services, a huge 55% have parents who have or do work in the industry. This indicates that having a parent in financial services either encourages young people to enter the sector or gives them an edge when it comes to accessing it.[iii]This is a concerning realisation, with industry experts believing that the drop in new blood within the sector could have serious knock-on effects. The lack of interest from young people who currently have no link to financial services, means that the talent pool is becoming narrower and less diverse.There are a number of ways that new talent can be attracted into the industry. It will require some strategy and effort on the part of financial services companies but will reap dividends in terms of the future of the financial services sector.An interesting ...
17/05/2019
Insurance Benefits as Volvo Tackles Drink Driving: Insurance Benefits as Volvo Tackles Drink Driving In their continued efforts to maintain a reputation for producing the safest cars in the world, Volvo have announced plans to reduce drink driving - by manufacturing cars that can detect and respond when a driver has been drinking alcohol. The cars will be designed to react to a drink driver in one of a number of ways, with the aim of making the vehicle, driver and other road users safe.In the UK an estimated 230 people were killed in accidents involving a drink driver in 2016; a number which accounts for around 13% of all road traffic fatalities in that year. Over consumption of alcohol also causes approximately 5% of all reported car accident casualties.[i] Therefore, the prospect of eradicating drink driving related injury and fatalities is enormously significant.While the devastating human cost of drink driving remains the main motivating factor behind the push to stamp out this dangerous habit, there is also a financial cost to driving under the influence of alcohol.Insurers pay out figures in the millions to cover the financial claims resulting from drink driving accidents. While many insurers have clauses that exclude pay outs to drivers who are under the influence of alcohol, the companies still remain legally obliged to cover any third-party costs; which could run into the hundreds of thousands in the event of very serious injuries. While they may attempt to recoup these costs from the driver, the reality is that in all likelihood, the insurer will remain out of pocket. For insurance companies, the financial benefits of a reduction in drink driving are huge.“Big Brother” or big benefit?The technology would not only target drivers that are drunk. The system involves cameras and sensors that will be able to assess a number of types of erratic driving. This means that other problems that cause dangerous driving; such as driving under the influence of drugs, excessive tiredness and driving while ...
03/04/2019
Insurtech: Competitors or Collaborators?: Insurtech: Competitors or Collaborators?Just as Fintechs have disrupted the financial industry in recent years, Insurtechs are now making a very visible impact on the insurance market. Grappling with these new companies is vital to the survival of existing, traditional insurance providers. One survey suggests that as many as 74% of incumbent insurance companies accept that Insurtechs are a challenge to them. In spite of this, only 28% are looking at the possibility of partnering with these new companies, and less than 14% are involved in Insurtech programs.[i] These are worrying statistics, as a refusal to engage with these emerging technologies could spell the end for traditional incumbents. However, with foresight and a willingness to change, insurance companies can benefit from the products and services of Insurtechs, utilising them to complement, promote and extend the services that they already provide. Working with these companies is a way to not only survive the disruption caused by the rise of Insurtechs; but to grow and develop through strategic collaborations. Insurtech companies provide innovative products that are able to improve on every part of the value chain within the insurance sector. Insurtech can also help to identify and then market to gaps in the insurance market, opening up revenue streams that were not previously available. · DistributionMcKinsey Panorama conducted an analysis of Insurtechs, using their own database which holds records on over 500 Insurtech companies. They suggest that 37% of Insurtechs are involved with the distribution of insurance, with 75% of these having a specific emphasis on the enabling of distribution; such as allowing easy access and simple comparison of products for consumers.[ii]This allows existing companies to promote their products and services in a marketplace that they may not otherwise have had access to. There is opportunity for companies that are smaller or ...
12/03/2019
133% Increase in Compensation for Financial Clients: 133% Increase in Compensation for Financial ClientsThe Financial Conduct Authority have announced plans for the Financial Ombudsman Service to increase the amount of compensation that they can demand a firm pays to a client. It is set to more than double the limit – from the current £150,000 to £350,000 in April 2019. The FCA has recently completed a consultation on the proposals.This new amount will only apply to transactions that take place from April 2019. However, they are proposing that the amount be increased to £160,000 for claims made about business that took place prior to April 2019. In addition, both limits will increase annually in line with inflation from 2020 onwards.Why the change?There are a number of reasons that the FCA believes the changes are necessary. Many clients (which includes those with pension investments) may be set to lose far more than the £150,000 that is currently the limit if an investment goes wrong. Each year, around 2,000 complaints are upheld by the FOS that are above £150,000 in value.[i] Almost 75% of these claims are between £150,000 and £350,000. [ii] Currently, the FOS can request that companies pay the complete amount but cannot enforce any amount above the £150,000. While some companies do choose to accept the larger amount and pay what is requested, this can create a discrepancy between large companies that can afford to pay the extra and smaller companies that may not.While clients can take companies to court for the larger amount, the FCA points out that many clients may be unable to afford to pursue legal action. In addition, a complex drawn out legal process may not incentivise companies to keep standards high in their interactions with clients. They believe that an easy recourse to compensation through their service is far more compelling in terms of keeping up standards.[iii]OpportunitiesWhile this increase in the limit may initially appear concerning to financial service companies, it would be a mistake ...

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