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THE UK’S PAIN IN THE NECK CULTURE MUST END SAYS THE ABI

2012-04-24T08:59:04

People claiming whiplash injuries should not be entitled to compensation unless there is objective evidence that they have suffered injury. This is one of several radical reforms which the ABI today said needs to be considered to reduce the UK’s whiplash epidemic and bring down the costs of motor insurance. Britain’s thriving whiplash industry is now pushing up the cost of the average motor insurance policy by a staggering 20%.

Despite a fall in the number of car crashes, whiplash claims have risen by a third in the last three years. Every year 570,000 people claim for whiplash injuries – enough to fill the London Olympic Stadium seven times over. Last year these claims cost insurers over £2 billion, adding an extra £90 a year to the average annual motor premium of £440.

Speaking at an international whiplash conference in Bristol today, James Dalton, ABI’s Head of Motor and Liability said:

“If whiplash was an Olympic sport, the UK would be gold medallists. The fact that whiplash is virtually impossible to disprove means that for too many it has become the fraud of choice, often aided and abetted by ambulance-chasing lawyers and claims management firms”.

Outlining ideas for radical reform, James Dalton added:
“The crackdown on our whiplash epidemic has started with the Government’s reform of civil litigation which will reduce the scope for ‘have a go’ claims. But we also need to consider radical action if we are to get a grip on whiplash, such as:

• A system where whiplash claimants receive no compensation for alleged pain and suffering (general damages) unless there is objective medical evidence of injury.
• Capping or reducing the level of damages for whiplash claims.
• Having a panel of independent doctors to assess whiplash claims, rather than the claimants GP.
• Greater use of bio-mechanical evidence that might enable the introduction of a speed threshold under which there would be a presumption that whiplash has not occurred.
“Only by thinking big and bold can we reduce the whiplash problem and the costs of motor insurance.”

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1 in 4 homeowners relying on trustworthy neighbour for home security

2012-04-19T11:43:29

For one in four people, having trustworthy neighbours is the key to feeling most secure at home, according to the latest Association of British Insurers (ABI) consumer survey*. But the findings highlight that many homeowners are needlessly putting themselves at risk of financial disaster by overlooking basic security precautions. To help homeowners protect themselves, the ABI has produced a guide on home insurance and some answers to common home insurance questions.

Nearly three in ten people admit to leaving doors unlocked and windows open when going out briefly, despite the fact that the survey showed 42% of people recognise the importance of good locks. With 36%** of all burglaries being opportunistic, failing to secure doors and windows is an open invitation to thieves, particularly as we approach summer. And with an estimated quarter*** of households admitting to having no contents insurance at all, mistakes like these could leave people footing a hefty bill.

The two new ABI guides offer advice on how to ensure you buy the right amount of cover and clearly set out what is covered by standard buildings and contents insurance and options people can pay extra for, such as accidental damage cover. The ABI has also produced a home security guide providing advice such as what to do if you are leaving your home unoccupied for a long period and how this might affect your insurance.

Nick Starling, Director of General Insurance at the ABI said:

“While it can be reassuring for householders to have neighbours they can trust, this alone cannot substitute the value of sensible home security measures. Common mistakes, such as leaving doors unlocked and windows open, could invite thieves, putting your possessions at risk. And with one in four households without contents insurance, homeowners could be left footing a big bill to replace valuables.

“Following sensible security measures and ensuring your property and its contents are adequately covered are the wise steps people should follow to protect their homes.”

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Celebrate safely - ABI publishes guide on organising street parties and other events

2012-04-03T08:17:05

With over 3,500 applications made so far to local authorities alone for street parties to celebrate the Queen’s Diamond Jubilee, this year looks set to be a bumper year for celebrations. To help party organisers ensure that events run smoothly, whether on public or private land or in your own home, the ABI has produced a guide.

‘Celebrate – An ABI guide to planning an event’ sets out what party organisers need to know, including:

·         Things to consider about your venue, such as is it safe for the number of people you expect, are outdoor activities involved, such as bouncy castles, and what fire aid will be available.

·         If planning a street party, steps you need to take, including contacting your local council.

·         Any requirements for public liability insurance and how this cover can help party organisers protect against things that could go wrong.

Nick Starling, ABI’s Director of General Insurance, said:

“With communities across the country planning thousands of events this year, a few common sense precautions will help ensure that events are fun and safe. Our guide sets out the essential information that any event organiser needs to know, to ensure that celebrations planned are memorable for all the right reasons.”

‘Celebrate – An ABI guide to planning an event' can be found on the ABI website www.abi.org.uk

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ABI commits to continuing dialogue with Europe over pensions

2012-03-26T17:03:14

Giving evidence to the House of Commons Work and Pensions Select Committee today, the ABI committed to continuing dialogue with Europe on pension initiatives but cautioned against making changes at a European level that could impact UK pension reform.

Maggie Craig, Director of Financial Conduct Regulation, ABI said:

“Improving pension outcomes for consumers is immensely important given the tremendous demographic challenge Europe is facing. The ABI believes the European Commission has a vital oversight role to play in addressing challenges in pension provision.”

This is a crucial year for the UK pensions industry. The ABI is a strong supporter of the pension reforms in the UK, in particular automatic enrolment, and has urged the European Commission not to engage in any activity as part of its pension policy that could derail these reforms or undermine them in any way.

The ABI believes that there needs to be further consideration and analysis around plans to read across aspects of Solvency II to the IORP Directive. Commenting on this issue, Maggie Craig said:

“The primary objective of any changes to the IORP Directive must be to improve pension outcomes and should be in line with the Commission’s objective of achieving adequate and sustainable pensions. We believe that requiring increased capital, reporting and disclosure requirements would add considerable burden to employer sponsored pension schemes. There are wider economic effects to consider in this debate including the impact on investment, growth and jobs in the market especially in the current climate.

“When considering Solvency II as a benchmark for amending the IORP Directive, it must be emphasised that, in the UK, pensions offered by insurance companies and employer sponsored occupational pension schemes are not the same and these differences merit different regulatory approaches.

“In the UK, defined benefit pension schemes must meet funding standards and the pension protection fund protects members if schemes fail. As a result, we believe there are already appropriate and suitable levels of beneficiary protection in this area.”

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Steps for homeowners to crack down on subsidence

2012-03-12T11:33:12

With many parts of the UK now officially in drought, worried homeowners may be looking out for tell-tale cracks that could be the first signs of subsidence. But the Association of British Insurers (ABI) is urging homeowners not to worry unnecessarily. Knowing what steps can be taken to reduce the risk of subsidence and what to do if you suspect it is happening can ensure that you do not end up with a problem.

What is subsidence?

Subsidence is the downward movement of the ground supporting a building caused by changing moisture levels, usually when the soil dries out or ground water levels drop. The movement is uneven, causing damage, such as cracks in walls, floors and ceilings. Heave, the upwards movement of the ground which can occur when dried-out soil becomes saturated, can also cause damage, as well as landslip, the sideways movement of foundations.

Causes of subsidence…

·         Trees – are a major cause as they remove moisture from the ground, sometimes sucking it from under foundations. A large deciduous tree can require more than of 50,000 litres a year. Problems tend to arise if trees are too close to buildings, or grow too big. Before planting trees or large shrubs in the garden, homeowners can get advice on recommended distances from the ABI website. A tree surgeon can advise on what to do with existing trees near the home and homeowners can begin a programme of pruning to control the amount of foliage produced to reduce the tree’s water intake.

·         Escape of water – for example from damaged drains, can also cause foundations to weaken. Regular maintenance of your home and outbuildings is key to detecting such damage early on.

·         Clay soils – contract and expand with changing moisture levels. Most shrinkable clay in the UK is located in the South East, the area most affected by lack of rainfall and most prone to subsidence.

If you suspect subsidence…

·         Don’t panic – minor cracking, usually below 5mm wide, can be due to other causes, such as settlement of soil in new build homes, and the drying and shrinking of building materials. These cracks can usually be dealt with by routine maintenance and decoration.

·         Cracks – wider than 5mm which a 10p can be slotted into are usually the first sign of subsidence. They tend to be visible from both inside and outside the building, tapered and extend below the damp proof.

·         Distortions – such as doors that may no longer shut evenly and windows slanted in appearance are also signs of subsidence

Insurance…

·         Contact your insurer as soon as possible if you notice larger cracks or distortions. Subsidence damage is covered as standard under home building insurance policies.

·         Your insurer will send out a specialist to investigate the cause of damage and arrange for repair work. Some investigations can take some time to ensure proper and lasting repair work is carried out.

·         Seeking specialist advice on removing trees near to the home can be useful, however it is not a requirement from most insurers

·         Standard subsidence excesses (the first part of the claim that you pay yourself) tend to be £1,000 under most buildings insurance policies.

·         Most leading insurers sign up to an ABI agreement so that your subsidence claim can be handled by the most appropriate insurer with minimum fuss if you have recently changed your insurer or moved home

·         Your insurer should also continue to offer you cover once you have made a subsidence claim and it is good practice to offer to insure new owners when you sell your house.

Nick Starling, Director of General Insurance at the ABI comments:

“There are steps homeowners can take during drought conditions to avoid potential subsidence damage. Regular maintenance of the home and outbuildings is key to preventing any damage and detecting signs, such as cracks, early on.

“Many minor wall cracks may not be caused by subsidence and can be dealt with by routine decoration. Insurers will be able to make a correct assessment of suspected subsidence and homeowners can also seek specialist advice on trees near to the home.”

ABI announces new agreement to improve access to motor and travel insurance for older customers

2012-03-08T12:22:57

In a speech to the Age UK conference today, Otto Thoresen announced that the Association of British Insurers (ABI) has led an agreement, with the British Insurance Brokers Association and the Government, which will require all ABI members, who do not provide insurance because they apply age restrictions, to ‘signpost’ customers to an alternative appropriate provider, who will offer a product regardless of age. This agreement will come into force in April 2012.

Otto Thoresen, Director General, ABI said

“With an ageing population, it is crucial that we make it easier for older people to access financial services. This agreement will make it easier for older customers to access motor and travel insurance. It means all ABI members commit to signposting and helping older customers find another provider if they cannot help provide them with coverage. We are committed to making sure that all people who need insurance find it as easy as possible to get it.”

Otto Thoresen also announced that the ABI will be increasing transparency by publishing aggregated claims data each year, so that consumers can be confident that age is relevant to the assessment of risk, for both motor and travel insurance.

The Age Agreement will reflect that people get insurance in many different ways. ABI research shows that while 41% of drivers in their late 60s would prefer to use a website, this drops to 25% for those aged 75 and over, with the remaining 75% of over 75s preferring to use the phone. The ABI will work with its members to find the best way to communicate with older people, particularly where there are specific communication needs related to hearing or sight.

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No time to lose in securing a long- term, sustainable flood insurance market says the ABI

2012-03-07T09:41:13

The Association of British Insurers (ABI) today warned that the clock is ticking on the need to secure a long-term sustainable flood insurance market in the UK. Without a new approach, the ABI estimates that up to 200,000 property owners will struggle to get affordable flood insurance when the current flood insurance agreement with the Government ends in June 2013.

Speaking at the National Flood Forum Conference today (7 March), James Dalton, the ABI’s Head of Property Insurance, said:

“Insurers, the Government and groups like the National Flood Forum all want to see a sustainable, affordable long term market for flood insurance in the UK.

“But we are running out of time to ensure that people in high flood risk areas can continue to get affordable flood insurance when the Statement of Principles expires in June 2013. It is widely recognised that the current industry agreement with the Government is unsustainable, has thwarted choice for consumers, and is well past its ‘best by’ date.

“No action is no option. Insurers are determined to do everything possible to ensure that flood insurance remains as widely available to our flood vulnerable communities. But this cannot be achieved without Government help, as happens in other countries.”

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Innovation vital to engaging new generation of savers

2012-03-07T09:20:30

In a speech today, Otto Thoresen, Director General at the Association of British Insurers (ABI), will call for innovation and forward thinking to keep a new generation of young savers engaged.

Otto Thoresen’s speech at the NEST Forum today (7th March) comes as the UK’s biggest employers prepare to automatically enrol up to 10 million people into workplace pension schemes in less than six months’ time.

ABI consumer research has shown that auto-enrolment could be a significant opportunity for many to break their ‘savings stalemate’, with more than half (53%) of people not already in a company pension willing to remain ‘opted-in’ when the scheme is rolled out.* The additional ‘free money’ savers will receive from employer contributions was by far the biggest reason encouraging many to persist with saving under the auto-enrolment scheme.

And with the research also showing that 81% of people want to save more, Otto Thoresen will argue that the biggest challenge will not necessarily be convincing people on the need to save, but keeping them engaged in the saving process and persuading them it is worthwhile.

He will urge the industry to consider innovative ways to engage the new younger generation of savers that auto-enrolment will tap into, through ways that are easy and natural to them, such as social media and new technologies. He will also call for simple and consistent ways for people to track their savings journey.

Alongside this, Otto Thoresen will stress the importance of improving existing systems to help customers get more from their savings, pointing to the launch this week of an ABI code of conduct that will see the industry commit to measures to help savers shop around for the best annuity, which converts their pension into a retirement income.

Otto Thoresen said:

“Today we are talking about how to improve understanding among a new generation of savers. Young people are challenged by debt, from student loans, to the costs of setting up a home or getting a job, so we need to put ourselves in their shoes. The industry, NEST and the Government are geared up for the challenge of making it easier for this group to get involved in saving.

“This week we published our new code of conduct to ensure customers get the best deal for their annuity. It’s time to work together to fix the current system of pension provision and lay the ground for a better one for the future. The introduction of auto-enrolment provides us with the perfect opportunity to do so.”

ENDS

Insurance industry takes big steps to help customers make the most of their pension savings

2012-03-05T11:21:48

Insurance industry takes big steps to help customers make the most of their pension savings

People approaching retirement will receive much greater support to get the best possible retirement income under a compulsory Code of Conduct launched today by the Association of British Insurers (ABI).

ABI figures show that a third of people do not shop around for an annuity when they reach retirement and, as a result, may be missing out on a higher income, potentially losing thousands of pounds over the course of their retirement. In addition, many customers who could qualify for an enhanced annuity, due to medical conditions or lifestyle choices, buy a conventional annuity, which may mean they miss out on a higher income during retirement.

The ABI’s Code of Conduct will ensure customers have access to information to enable them to make an informed decision about annuities appropriate to their needs and lifestyle in retirement. The Code continues the work of the ABI to improve customer engagement and contribute to the financial education of customers.

The Code of Conduct will require the ABI’s members to:
Provide clear and consistent communications to ensure customers are able to make informed and proactive decisions about retirement income products, and are able to shop around for the most appropriate product.

Prominently highlight enhanced annuities, and the much higher income they can potentially offer, and inform customers whether they offer these products, and how to find out who does.
Clearly signpost customers to advice and support, both from regulated advisers and government-backed advice organisations.
Establish transparency in the annuity market so that customers have a clear picture of how individual providers’ product offerings fit in with the wider market.

The ABI’s compulsory Code of Conduct comes in force today and will be implemented by members by 1 March 2013. The ABI and its members will continue to develop the detail of the transparency commitment to ensure comparisons can be made accurately and fairly, with a deadline for implementation by 1 March 2013.

Otto Thoresen, Director General, ABI said:
“These changes are a big step forward for customers at retirement and were informed by extensive consultation and consumer research. Improved processes, better signposting and transparency will combine to make customers more confident and more able to make decisions about their retirement income. This is not the end of our work helping customers to get the best deal at retirement; we will continue to work with key stakeholders including Government and the advisory community to improve the customer experience.”

Mark Hoban, MP and Financial Secretary to the Treasury said:
"I want to help people approaching retirement to get the best possible deal when buying an annuity. That's why I welcome the ABI’s new Code of Conduct which, together with the impartial support offered by the Money Advice Service and the Pensions Advisory Service, will help those approaching retirement get the most out of their savings fund. The announcement today, as an outcome of the work of the OMO Review Group is an impressive example of industry, consumer groups and Government working together with the ABI to deliver a package of measures that will help consumers.”

Tom McPhail, Chairman, Pensions Income Choice Association and Head of Pensions Research, Hargreaves Lansdown said:
“Everybody needs to shop around so that they can make an informed decision about what type of retirement income will best suit their needs and to ensure that they are not missing out on a higher income. With the code of conduct, we are now making real progress in meeting the needs of the hundreds of thousands of pension investors every year who rely on the pensions industry to help them through the retirement process. We will continue to work with the ABI, the DWP, Treasury and other stakeholders to build on the reforms announced today.”

ENDS

ABI says new EU solvency rules must not deter long term growth and investment in the economy

2012-03-01T10:34:44

In a speech today to the Economist Insurance Summit, Otto Thoresen, Director General, ABI, called for EU policy makers to ensure draft EU Solvency II rules do not prohibit insurers from driving growth in the UK and make long term investments which generate growth in the economy.

Otto Thoresen said:

“The draft rules pose a challenge to the UK pension annuity market and to insurers’ ability to make long term investments and generate growth in the economy.

“There is still an urgent need to clarify and expand the wording on the Matching Premium. Achieving this would enable insurers to play a major role in infrastructure investing as outlined in the Chancellor’s autumn statement last year.”

He said the insurance industry was an important contributor to the UK economy with a key part to play in a return to growth, and that it was therefore vital that insurers, whether from the UK or other European countries, were able to do business across the globe on a broadly level playing field.

He explained that, if the EU insurance sector were to remain a global market leader, third country equivalence would need to be higher up the political agenda, and it would be imperative that EU companies were not placed at a competitive disadvantage against local players in international markets.

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Time to put the brake on the UK's exorbitant legal bill says the ABI

2012-02-23T14:34:37

Time to put a brake on the UK’s exorbitant legal bill says the ABI

Unaffordable, unsustainable, unacceptable – legal fees in settling motor personal injury claims now cost UK consumers £1,666 every minute. ABI calls for reduction in fixed legal fees.

The ABI today (Thursday, 23 February) highlights why the UK’s exorbitant legal fees bill must be cut. UK consumers are now paying the equivalent of £1,666 every minute of every day in legal fees in settling personal injury claims following motor accidents.

UK consumers are now paying £2.4 million a day through their motor insurance premiums – the equivalent of £1,666 every minute – in legal fees incurred in settling low value motor personal injury claims of up to £10,000.

On top of this, legal costs often exceed compensation payments:

- One insurer’s average claimant legal costs in 2010 represented 142% of the sums received by injured victims.

- A recently reported compensation claim for a work-related injury for £12,750 settled out of court attracted legal costs of £74,000. After hearing about the case, Lord Neuberger, the Master of the Rolls, said of the case that there is something “out of kilter” in the civil justice system.
- A legal bill of £37,250 was run up in settling a claim for £15,000 in respect of injuries sustained by a woman who fell into the moat at a castle (source: National Trust).
- Between 2004-2011 there has been a 5% rise in NHS legal costs, but a 130% increase in claimant legal costs. In the financial year 2010/2011 the NHS paid out £257 million in lawyers’ fees following claims.

Speaking today at a conference today ‘The Future of Casualty Claims’, James Dalton, the ABI’s Head of Motor and Liability Insurance said:

“Since its introduction in 2010 the fast track process for settling lower value personal injury claims has led to significantly quicker compensation pay outs. But the fixed costs in the process remain too high.

“The UK’s compensation system is riddled with disproportionate and excessive legal costs, often exceeding compensation awards. This means higher insurance costs for motorists and businesses and a heavy cost burden on local authorities and the NHS.

“The Government must press ahead with the much-needed reform of our dysfunctional compensation system, which, together with the ban on the selling on of personal details of potential claimants, will enable solicitors’ fixed fees to be reduced to more realistic levels. Lower legal costs will help bring down the cost of motor insurance for all drivers.”

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Employer pension contributions could break the ‘savings stalemate’ for more than half of people

2012-01-25T10:48:07

The opportunity to benefit from employer contributions remains the single biggest reason for people to stay ‘auto-enrolled’ in new workplace pension schemes, according to latest research from the Association of British Insurers (ABI). The findings come as the Government today announces a clear timetable for the roll-out of auto-enrolment.

The ABI consumer survey* suggests the introduction of auto-enrolment from October could not come fast enough for many as a way of bringing them out of the ‘savings stalemate’. Not missing out on employer pension contributions (47%) and on tax relief from contributions (14%) were the most popular reasons encouraging people to remain ‘opted-in’ to workplace schemes. This clearly shows that people see the value of their money being made to work harder by the extra top ups they will get from their employer and the Government.

Overall, more than half (53%) of people not already in a company pension scheme say they will remain ‘opted-in’ when their employers begin automatically enrolling them in eight months’ time, and this comes before any significant promotion of the new scheme. With a further 30% of people still undecided, we could see even more remaining ‘opted-in’ and saving for their future.

A similar scheme in New Zealand has seen the amount of workers saving for their pension more than double, with more than half of the country’s working population now enrolled**. The UK could see even higher figures as its auto-enrolment arrangements will cover all eligible workers, rather than only those who are changing jobs or just starting work.

Maggie Craig, Acting Director of Life, Savings and Protection at the ABI said:

“It’s encouraging to see a significant amount of people already recognising the value of the incoming auto-enrolment into pension schemes and we are pleased the Government has today announced a clear timetable for its roll-out. Around half of workers are either not saving into a pension or not saving enough, so auto-enrolment will give many people the much needed nudge to save for their retirement and break the ‘savings stalemate’. Whilst current financial pressures can mean building up a sufficient pension pot often gets put on the backburner, people should not ignore the opportunity to benefit from employer contributions and tax relief on their own contributions.”

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ABI RESPONDS TO TRANSPORT SELECT COMMITTEE REPORT ON THE COST OF MOTOR INSURANCE

2012-01-12T08:47:20

Responding to the publication today of the Transport Select Committee report on the cost of motor insurance, Nick Starling, Director of General Insurance at the ABI, said:

“We are pleased that the Transport Select Committee has recognised that spiralling personal injury claims are the real reason car insurance premiums have been increasing and made recommendations for meaningful reform. It is absolutely critical that Britain’s whiplash epidemic is tackled once and for all and the Select Committee’s acknowledgment that the bar to receiving compensation for whiplash is too low is a step in the right direction.

“The Committee is also right that the fees lawyers receive need to be reviewed as they currently add unnecessary cost.

“Every motorist wants the best deal and insurers are determined to deliver value for money motor insurance. Our customers are fed up of getting text messages, fed up of the compensation culture and have had enough of paying higher car insurance premiums to line the pockets of ambulance chasing lawyers and claims management companies.

“We are baffled though that the Transport Select Committee has again called for the transparency of referral fee arrangements of insurers. Referral fees should be banned altogether and not made more transparent - and that ban should apply to all organisations receiving them, not just insurers. Banning referral fees and, crucially, reducing legal costs will improve the situation for customers."

ABI MEDIA CONTACTS OVER CHRISTMAS AND THE NEW YEAR HOLIDAY

2011-12-22T15:58:04

For comment and help with any insurance-related story over the Christmas and New Year period, the ABI press contacts are:

Up to and including 23 December: ABI press office open as usual

24 - 25 December: Malcolm Tarling - 07776 147667

26 - 27 December: Sarah Bailey - 07725 372636

28 – 29 December: Office open. Malcolm Tarling

07776 147667

30 December: Office open. Sarah Bailey

07725 372636

31 December - 2 January: Sarah Bailey

07725 372636

3 January 2012: ABI press office open as usual

AWAY THIS CHRISTMAS? AVOID RETURNING HOME TO THE MISERY OF BURST PIPES

2011-12-22T12:09:20

Homeowners away for the Christmas break are urged by the ABI to take steps to reduce the risk of returning home to the trauma and expense of burst pipes.

At the height of the abnormally cold spell last winter, insurers dealt with 3,500 claims for burst pipe damage every day. The typical cost of household damage caused by burst pipes last winter averaged up to £7,000, but costs can be much more.

If you are planning to leave your property empty - even just overnight - during winter:

· Leave your heating on for at least an hour a day while you are away from home. In severe weather, or if severe weather is forecast, you should leave your heating on day and night at your usual temperature setting.

· If it is very cold, leave the access to your loft open. This allows warm air from other parts of the house to circulate in the loft and will help prevent pipes freezing. Check that loft insulation is laid over, and not under, pipes in the loft

· Make sure that you know where your stopcock is, and that it works so that you can turn off the water supply if needed.

· Ask a friend or relative to visit your home every day while you are away. This will mean that, if you do suffer a burst pipe, it will be detected as soon as possible. Make sure that you tell them where the stopcock is located.

If a pipe freezes:

· Thaw out the pipe using gentle heat like a hairdryer or towels soaked in warm water.

· Move furniture and carpet (where practical) away from the frozen pipe to minimise damage if the pipe bursts.

If a pipe bursts:

· Turn off the water at the stopcock.

· Switch off the central heating to avoid further damage.

· If you have a water tank, drain the system by turning on all your taps.

· Contact your home insurance provider for help and advice. Most home insurers provide 24 hour emergency helplines that can arrange for repairs to be carried out as soon as possible.

Nick Starling, Director of General Insurance, ABI, said:

“When freezing weather arrives so do frozen and burst pipes. Yet taking a few simple precautions, especially if you plan to be away during the winter, will greatly reduce the risk of returning home to problems.

“Home insurance will pay for the often considerable damage caused by burst pipes, but it cannot compensate for the misery and inconvenience that they bring.”

- ENDS -

Don’t start your new year on a slippery slope

2011-12-22T10:53:26

With thousands set to beat the January blues by booking a winter escape, the Association of British Insurers (ABI) advises ski holidaymakers to avoid starting their new year on the wrong foot by making sure they’re covered on the slopes.

Whilst many people rely on annual travel insurance policies, skiers should be warned not to jet off without full winter sports cover. A worrying 31%* believe a standard travel policy will cover them for sports related injuries, such as skiing. And with European destinations like the French Alps and Switzerland being popular, skiers should be warned that the European Health Insurance Card (EHIC) scheme is not likely to cover all costs associated with an accident, like repatriation back to the UK, which over 62%** of people wrongly believe EHIC covers.

A ski injury could dwarf the actual cost of the holiday. Insurers paid out:

£9,420 for medical treatment, airlift and repatriation for a fractured vertebrae of a skier in France
£18,220 for medical treatment and repatriation for someone who broke their leg snowboarding in the USA.

Many holidaymakers were concerned earlier in the season as warm weather threatened to ruin ski trips. Winter sports insurance could cover the cost for transfer to an alternative resort because of lack of snow. And conversely, if the weather takes a turn for the worst, ski cover could also pay out for piste closure due to too much slow or avalanche.

Nick Starling, Director of General Insurance at the ABI said:

“Before setting off to the slopes for the busy ski season, avoid skipping on essential cover and ruining your winter escape. The cost of medical treatment for ski injuries could put most people out of pocket, so it’s vital to ensure you have adequate winter sports cover.”

- ENDS -

Don’t get wrapped up in common Christmas mishaps

2011-12-21T14:20:32

With the festive season well underway – households stocking up on gifts, Christmas parties in full swing and festive travel plans being made – the Association of British Insurers warns people not to get caught out in some of the most common Christmas calamities.

Don’t get burnt out…

Candles are popular at Christmas and the extensive Christmas cooking can mean fire risk is heightened. More than half of home fires are caused by cooking accidents and throughout the year candles start an average of five household fires a day.*

Ensure smoke alarms are fitted, have batteries and are tested. Smoke alarms are absent in 37%** of home fires;
Avoid leaving candles unattended or burning whilst you go to sleep;
Always keep an eye on what’s in the oven or on the stove.

Protect your possessions…

With all the extra gifts in most homes over Christmas, a theft or accidental damage could put a real dampener on festive spirits…and your wallet.

Many insurers automatically increase your contents insurance over Christmas to account for extra presents. Check this with your insurer;
But don’t forget to re-evaluate the value of your contents insurance after Christmas. Expensive gifts may mean your current cover is not enough;
36%*** of all burglaries are opportunistic. Ensure doors and windows are properly locked - even if you’re just popping out to a neighbour for a festive drink.

Be wise, whether you’re home or away…

Thieves target unoccupied homes during the Christmas period. Last year insurers dealt with 10,000 burglary claims over Christmas. And at the height of last winter’s cold snap, insurers handled 3,500**** claims a day for damage caused by burst pipes. If you’re away over the season, take steps to avoid coming home to an unwanted surprise.

Prevent burst pipes by leaving heating on for at least an hour a day, or all day in severe weather;
Get a friend to visit your home regularly whilst away to detect burst pipes or burglaries early and minimise damage;
Make your home appear occupied with timer lighting to deter thieves;
- Ensure any gifts are not on display through windows.

Drive responsibly…

‘Tis the season to be merry…but also responsible when it comes to driving. Last year’s festive season saw 6,662***** arrests for drink driving.

If we experience a cold snap this year, motorists have reassurance that most insurers will not charge them extra for fitting winter tyres

If you’re drinking alcohol, do not drive;
Ensure winter tyres are fitted in accordance with manufacturers’ specifications.

Nick Starling, Director of General Insurance at the ABI said:

“Every year insurers deal with claims that put a real dampener on people’s festive spirits. To make sure the Christmas period is a happy one, don’t forget the common sense precautions that will help protect your home and possessions.”

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ABI PUBLISHES CONSUMER GUIDES ON EXTENDED WARRANTIES

2011-12-20T12:20:39

With many people on the lookout for household bargains during the post-Christmas sales, the ABI has published a consumer guide to extended warranties.

These policies are often sold alongside the purchase of household items such as washing machines, fridges and electrical equipment like televisions, and cover repair costs as a result of mechanical or electrical breakdown after a manufacturer or retailer’s guarantee has expired.

The ABI has also published a similar guide to motor warranties. These cover repair costs after the motor manufacturer’s guarantee has expired.

Both ABI guides set out:

- What policies typically cover

- Typical exclusions

- Points to consider when deciding whether or not to buy an extended warranty

- What to do if you have a complaint

Nick Starling, ABI’s Director of General Insurance, said:

“Customers need to understand fully the benefits and limitations of extended warranties, so if they buy a policy, it meets their needs. These guides provide essential information to help consumers make the right decision.”

The consumer guide to extended warranties can be found here.

The consumer guide to motor warranties can be found here.

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ABI launches consultation to encourage more people to shop around for a decent retirement income

2011-12-20T10:52:04

Many people are still missing out on a better retirement income by not shopping around when they cash in their pension for an annuity. The Association of British Insurers is launching a consultation to find out what more the industry can do to help people make good choices when they retire.

The ABI announced in September that it would introduce a compulsory code, binding all its members, to actively encourage people to shop around. Under the code ABI members will remove the annuity application form from all communication they send to their customers which means customers will not simply be able to roll their pension over into an annuity with the same provider.

Today’s consultation asks for views on this draft code of conduct which will go further than simply removing the application form:

All communication with customers must include a standard statement on the first page about the benefits of shopping around

Illustrations of possible annuities given by the provider which have not been asked for by the customer must follow strict rules to ensure options are comparable and include a very clear statement about the benefits of enhanced annuities due to medical conditions even if the provider does not offer the product

Providers’ sales processes must take customers through the key questions they should consider when buying an annuity.

Maggie Craig, Director of Life and Savings, ABI said:

“We have worked very hard with our member firms to encourage more people to shop around at retirement, but there are still too many people who choose not to. They could be missing out on thousands of pounds of retirement income as a result. We want to do everything we can to help people get a good income in retirement which is why we are asking for views on the code we plan to introduce. We want to make sure our proposals will really make a difference so we will also research what will have an impact on customer behaviour to help people make good choices.”

Since 2009 the number of people buying an annuity from a different provider has increased from 36 per cent to 44 per cent which is encouraging, but there are still a third of people who choose not to shop around.

The ABI is also very interested in hearing views on whether providers’ illustrations of possible annuity options have an impact on customer behaviour and plans to undertake consumer research to gather evidence on whether the code will have the desired effect of more people shopping around.

ABI calls on the Government and Financial Ombudsman Service to adopt a focused approach to publishing ombudsman decisions

2011-12-16T08:59:51

The ABI supports greater transparency but questions whether the publication of all ombudsman decisions is the best approach for providing useful insight, in its response to the Financial Ombudsman Service’s consultation on the issue.

Whilst a small number of consumer complaints can raise broader industry-wide issues, the very individual and unique nature of the vast majority of Financial Ombudsmen cases makes reading lessons into thousands of decisions impractical and potentially misleading.

The ABI would like to see the Government adopt a more balanced approach in its legislation, giving the Financial Ombudsman Service the right to publish only those decisions that may serve a useful purpose for consumers and firms.

Maggie Craig, Director of Financial Conduct Regulation at the Association of British Insurers, commented:

"Whilst the ABI supports transparency, it should be a means to an end, not an end in itself. Government legislation should encourage the Financial Ombudsman Service to work closely with consumer groups and the industry to select the most appropriate ombudsman cases for publication.”

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