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Myclaim Market Update June 2009

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First Prosecution under the Corporate Manslaughter Act 2007

Just over a year from its coming into force, the first prosecution for corporate manslaughter has been bought following the death of a junior geologist crushed to death whilst working on site. There are two things that are striking about this. Firstly, the CMA 2007 was envisaged with large disasters in mind (the Herald of Free Enterprise disaster for instance) this case was still covered by the remit of the Act. Secondly, for insurance providers and their clients there are important issues about the amount of cover a policy can provide to deal with prosecutions of this sort. For instance should they cover prosecutions against all staff or only directors? What about appeal costs? There are a number of issues to be examined on this point.

Insurer that lost laptop breached Data Protection Act

Amicus Legal were declared to be in breach of the Data Protection Act by the Information Commissioner after a contracted consultant lost an unencrypted laptop containing personal details of around 100,000 customers. The important point to note about this case was that Amicus Legal were liable as the data controller even though the laptop was not directly owned by the company but by one of their contractors.

KGM Motor Insurance creates new claims handling jobs

KGM is expanding its in house claims department as part of a plan that includes providing brokers with direct access to expert underwriters. This follows an overall plan to grow the business and to ensure all aspects of the company’s activities are properly supported.

ABI warns against over regulation during credit crisis

The Association of British Insurers (ABI) has warned that the extension of regulatory powers brought in as a result of the disruption in the banking sector must be carefully reviewed when applied to the insurance sector. Measures applied to banking should not, according to ABI, be applied to other parts of the financial sector and attempts to apply similar regulatory methods might inhibit growth and sustainability in insurance.

AON predicts increased premiums in the marine insurance market

Insurance giant AON has indicated that premiums in the insurance market are likely to rise in the face of reduced premium volumes following marked reductions in marine activity. An abundant capacity of providers will however restrain the expected increase in premiums across the marine market.

American insurance giant Aon to sponsor Manchester United

In one of the biggest, if not the biggest, sponsorship deal of its sort Chicago based insurance giant Aon will be sponsoring football giant Manchester United to the tune of £80 million for the 2010/2011 season after AIG were unable to match the amount on offer.

Association of Friendly Societies reports increased sales

The AFS which sells income protection policies has reported an increase of 14% in sales of their products. This was attributed to greater recognition of their services from independent financial advisers.

Government extends credit insurance

After limited take up of the government’s original scheme, the Chancellor of the Exchequer Alistair Darling has extended the scheme to provide credit insurance top up cover. Originally only supposed to be for those affected since 1 April 2009, the start date has now been moved back to 1 October 2009. Credit insurers normally insure supplier’s against non-payment by businesses but due to the credit crisis, cover has in many cases been withdrawn. This has left many businesses in a very serious situation in terms of their cash flow.
Whilst welcoming this change, many have said that it does not go far enough and that in fact the problem first affected the economy from 1 April 2008 and so the top up should be extended back to that date.

Holidaymakers not covered by insurance when drunk

A recent survey has shown that when going on holiday as many as 70% of holiday makers had no idea that they would have to pay medical costs directly themselves if injured whilst drunk. In the same survey many people admitted to getting very drunk whilst on holiday. This can also affect other unfortunate episodes related to drunkenness such as the loss of passports, wallets, cameras or mobile phones.
This will therefore be a surprise to many holiday makers this year who should accordingly review their policies to ensure they are clear on what they are covered and what they are not.

AXA donate to help people back to work

AXA Insurance has donated £250,000 to the vocational rehabilitation team at the Papworth Trust. The trust was named Rehab Provider of the Year 2008 in the Eclipse Proclaim Personal Injury Awards. The UK currently trails badly behind the US and Scandinavian countries, for example, in ensuring seriously injured people are able to return to paid employment.

People drop insurance cover to save money in credit crisis

Research by the Association of British Insurers (ABI) has indicated that nearly a quarter of householders have cancelled their contents insurance. Perhaps even more alarmingly, 17% of households have cancelled their building insurance, which in the occurrence of a claim could prove to be very expensive indeed.

Two Thirds of Insurers plan to expand

Despite the economic downturn, a survey by Accenture indicates that two thirds of the world’s top 104 insurance companies plan to expand beyond their home markets over the next year. Brazil, Russia, India and China are the countries most often referred to as being target markets followed by other Asian countries and then Western Europe.

• MyClaim-Monthly-Market-Update-June-2009.doc