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MyClaim Market Update December 2009

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Allianz launching new protection products

Expanding into the legal protection market, Allianz have launched Family Resolve and Pro-Motor Legal Protection.  They can be added to any broker household insurance policy and provide for key areas such as personal injury, consumer contracts and employment disputes.  The motor policy section includes claims against the Motor Insurance Bureau.

One in Four US properties in negative equity

Figures from September 2009 indicate that nearly 23% or effectively one in four of residential properties in the United States are in negative equity following the credit crunch and the reduction in property values.  Of particular concern is the pressure being brought to bear on the US government insurer, the Federal Housing Administration. Whilst recent modest rises in property values have slowed the growth of negative equity, there is great concern about the longevity of this stagnation of the property market and the effect it will have on the rest of the economy.

Public back action against uninsured motorists

Two recent polls suggest that the British public is fed up with uninsured motorists driving at the expense of honest insured drivers.  A poll by YouGov commissioned by the Association of British Insurers shows that there is widespread support for further action to be taken against drivers who drive without proper insurance, especially as uninsured drivers are considered to be more likely to cause accidents.

Further research shows that the use of mobile phones whilst driving is considered to be a very serious danger to other road users.  In addition there is support for the idea that insurance companies should be able to check whether people obtaining insurance have motoring offences or endorsements.  This is so that people deliberately concealing offences cannot gain cheaper insurance at the expense of honest drivers who provide correct details and do not mislead insurance companies when obtaining policies.

Cigarette Company ordered to pay $300 million in compensation

The cigarette company Philip Morris has been ordered to pay an ex-smoker $300 million in compensation for medical conditions related to smoking.  The claimant is now wheelchair bound.  Much of the compensation was awarded for punitive damages, that is by way of punishing the defendant for their actions.  Philip Morris are now seeking to appeal this on the basis that it is excessive.  A great deal rests on any such appeal as this claim was a lead case in a class action filed by a large number of claimants.

Insurance giant warns climate is approaching “tipping point”

A study by insurance company Allianz and the environmental organization WWF has highlighted concern that global climate change is reaching a “tipping point” which could lead to catastrophic environmental, social and economic consequences.

Focussing on the costs involved, it indicates that unless carbon emissions peak soon, irreversible changes to the world’s climate will have a huge impact on the global economy.

Richard Hammond can’t get travel insurance

The well known TV personality, who suffered a serious crash whilst filming Top Gear, is finding it difficult to get travel insurance due to his history.  In trying to get cover for a skiing trip he has to declare past problems, including a twisted ankle whilst running.  All of this is making it difficult for him to get cover.

Flooding and insurance rises

The Liberal Democrats have raised concerns that substantial increases in insurance premiums have threatened to price people out of the property market.  With particular emphasis on areas in Wales, some policies have gone from having a £1,000 premium to over £3,700 with a £10,000 excess.  MP Lembit Opik has suggested that these sorts of increases will encourage people to live dangerously and not got to the expense of obtaining insurance, with potentially disastrous results. This follows recent catastrophic flooding in parts of the UK.

Bank of England backs catastrophe insurance

With the background of the banking crisis of last year very much in mind, leaders at the Bank of England have touted new means of ensuring a future crisis does not present as great a threat to economic stability.  The financial means of providing this stability is referred to as “contingent capital” which could form part of a company’s recovery plan.

These plans accompanied further proposals from the government for legislative measures to control bonus payments to bankers; measures that have proved to be controversial to some in controlling otherwise private arrangements.  Other reforms include structures to provide for class actions against financial companies that mislead customers and increased powers for the Financial Services Authority to demand banks pay compensation to groups of consumers.