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No Kwik Fix from sales tactics that catch out a ‘retired demographic’

Last August my 90-year-old mother-in-law was cold-called by a company- called Kwik Fix and persuaded- to take out a £199 maintenance agreement for her boiler, although she already had one with British Gas.

I contacted Kwik Fix in November to cancel and was promised a refund, but it never materialised. Instead, she received a threat of legal action unless she paid a further £137 within the week. CM, Chesterfield, Derbyshire

My elderly mother received a call from Kwik Fix about renewing her boiler cover. The operative had some details pertaining to my late father which confused and distressed her. She thought the call had something to do with her solar panels and signed up. I handle her affairs and know that she has never had a policy with this company. I asked for a refund and was told it may take up to 28 days.

Nearly two months on we have heard nothing, and now none of its contact details seem to work. MB, London

It seems Kwik Fix Plumbers Ltd is none other than Boiler Shield Ltd, a Croydon-based company whose sales practices have already earned a place in this column. It has now given itself a new name, but its business operations seem to remain the same. It denies targeting older people and says that since it cold calls households during working hours, most of those who answer are a “retired demographic”.

In December it was fined £90,000 by the Information Commissioner’s Office for harassing elderly householders registered with the Telephone Preference Service and signing them up to policies they didn’t need.

“The actions of this company are truly despicable. Contacting anyone registered with the TPS without their consent involves breaking the law, but harassing vulnerable people is disgraceful,” says Stephen Eckersley, head of enforcement at ICO which, last March, prosecuted the company and its director for failing to register under the Data Protection Act.

Kwik Fix blames “naivety of the rules” and a new automated dialler and says it wasn’t given a fair hearing. The reason why the above refunds have not been forthcoming is, explains operations manager David Smith, because both customers had reported the transaction as fraudulent and initiated a chargeback claim via their bank. Once this is resolved, he promises, the refunds will be made.

However, both of you insist that no chargeback claims were made and when I question Smith further I receive no response. CM’s mother has since received her money. If the customers were registered with the TPS at the time of the sales calls, you should complain to the ICO.

MB, you can also do what Kwik Fix is clearly expecting you to do and make a claim to the bank under Section 75 of the Consumer Credit Act if a credit card was used or a chargeback claim if it was a debit card.

Red tape puts off firms from taking on apprentices

Bureaucracy is the biggest factor putting off insurance companies from taking on apprentices, according to delegates at the inaugural CII and Insurance Times Apprenticeships LIVE event.

The event, which was held on Monday to tie in with the start of National Apprenticeship Week, took place at the central London offices of the CII, Insurance Times’ partner on the year-long initiative that aims to recognise outstanding apprentices and apprenticeship schemes.

Nearly one-third (31%) of delegates identified bureaucracy as the biggest barrier to employing apprentices. The second biggest factor, cited by 19% of delegates, was confusion about the process of recruiting and funding apprentices. See table, below.

But Ashwin Mistry, president of the CII and chairman of Brokerbility, said none of the factors identified by delegates were sufficient to stop firms from recruiting apprentices.

“It makes strong commercial sense to bring people in, to invest for the future. We have succession issues. The gene pool is now desperately depleted,” said Mistry, whose company took on 32 apprentices last year.

Mistry criticised the insurance industry for not doing enough to draw young talent in. He said only one insurer (Allianz) was represented at a recent careers fair at Surrey University, where his son recently studied.

Most delegates at the event agreed with this sentiment, with 77% saying that the industry was not doing enough to shed its ‘dull’ reputation.

The overwhelming majority (93%) of delegates said they had fallen into insurance with just 2% reporting that they had actively chosen to work in the industry.

Zurich hires new broker market lead for Scotland

Zurich has promoted David Brown to head of broker market for Scotland.

Brown joined Zurich from NFU Mutual in February 2014 as a trading manager in Glasgow.

He replaces Chris Sime who has been promoted to head of sales.

Zurich director of market management Roy Standish said: “David has made a great impact since joining us just over a year ago and it’s absolutely right that he takes over from the sterling role Chris played in making our Scottish presence much more visible while he was in the role.

“We of course conducted a full search for the right candidate both inside and outside the organisation – but it’s truly testament to the hot bed of talent we have at Zurich that we can promote from within.”

Brown added: “A huge potential exists for us in the market north of the border and I’m really excited that I can help the build on the success of the team in serving this valuable broker community.”

Jelf buys loss adjuster Hamilton Bond

Broking group Jelf has bought Worcester-based claims consultant and loss adjuster Hamilton Bond Group.

Hamilton Bond founder and managing director Graeme Monce and his team, which includes six chartered loss adjusters, will remain at the firm and will continue to provide their existing services to the market.

The company was formed in 2004 and focuses mainly on material damage and business interruption claims.

Jelf chief executive Alex Alway (pictured) said: “This acquisition, which is a direct response to the challenges for brokers presented by the Insurance Law Act (2015), aims to build on a very successful existing relationship between two highly qualified businesses.

“Our ambition is to ensure outstanding claims management for clients. This partnership gives us the expertise to deliver on this aspiration.”

Jelf Insurance Brokers chief executive Phil Barton said: “Having worked closely with Hamilton Bond for many years, we are delighted to welcome Graeme and his team to the group.

“This move will bring specialist capability to Jelf that will add real value for our clients during what can undoubtedly be one of the most challenging, critical incidents they will experience.”

Monce added: “Joining Jelf is a completely natural step for our business, having developed a constructive and beneficial working relationship together over the years.

“We look forward to continuing to deliver high quality consultancy skills and service to an increasing number of clients at their moment of truth.”

Aviva puts forward plan to cut £2.5bn cost of whiplash claims

New proposals in the report, Road to Reform, include:

A reduced limitation period – all whiplash and soft tissue injuries must be claimed for within 12 months of the accident;

Minimum injury thresholds – symptoms must persist for longer than three months for a claim to be made;

Disability levels – medical reports assess the % of disability caused by the accident, with only those exceeding a certain level receiving compensation; and

Compensation tariffs – any compensation paid should be set against a ‘clear, transparent’ tariff dependent on the severity of the injury.

Aviva chief executive Maurice Tulloch said: “Whiplash remains an easy target for fraudsters, claims management companies and even opportunistic motorists who have not suffered an injury to ‘have a go’ and claim compensation,” he said.

“As long as there are financial incentives to pursue low-level injury claims with no real risk of incurring legal costs and without objective proof of being injured as a requirement, these problems will continue to plague insurers and their customers.”

Claims director Rob Townend told Insurance Times that in addition to reducing the incentives for making a whiplash claim, the proposals would also reduce the time it took to process a claim, therefore cutting costs and providing claimants with an improved service.

“[These proposals] will compress the process, and force people to think about treatment, diagnosis and notifying people they want to make a claim a lot quicker,” he said. “The quicker you deal with anything in the claims department the better it is.

“But, more importantly, you are treating the consumer’s symptoms a lot quicker.”

The report builds on previous recommendations published last year by Aviva, which suggested banning referral fees outright, compensating minor whiplash claims with treatment rather than cash, and increasing the small claims track limit to £5,000 from £1,000.

Direct Line beats 2013 COR target thanks to reserve releases

Direct Line Group has beaten its 2013 combined operating ratio (COR) target of 98%, reporting a 96.1% COR for the year.

This was a 3.1 percentage point improvement over 2012’s COR of 99.2%.

The COR improvement was driven by “higher than expected” reserve releases of £435.1m (2012: £322m), which shaved 12.4 percentage points from the COR (2012: 8.7 points).

The improvement came despite continued competition in motor, where Direct Line Group cut rates by 3%, and £89m of weather claims – £69m in home insurance and up to £13m in commercial.

The group also boosted profit after tax from continuing operations by 15% to £375.2m (2012: £326.5m).

However, gross written premium was down 4.1% to £3.8bn (2012: £4bn) as the company continued to underwrite selectively.

‘Good progress’

Direct Line Group chief executive Paul Geddes said: “We have continued to make good progress on our strategic priorities, helping us to achieve our 2013 financial targets in highly competitive markets.

“In UK motor, our improved pricing capability and claims management, as well as benefits arising from recent legal reforms, enabled us to reduce average prices for customers by 3% during 2013.

“In home, recent UK weather events have emphasised the importance of insurance. I am proud of our people who have been working tirelessly around the clock to assist customers affected by the floods and storms, both on the phones and on the ground.”

He added: “Looking forward to 2014, we will continue to pursue our strategic priorities and self-help agenda to enable us to deliver benefits for our customers and shareholders.”

More weather claims to come

Direct Line Group incurred £69m of weather claims in its home insurance business in 2013 and betwen £12m and £13m in its commercial division.

Most of the claims came from the flooding in the fourth quarter.

The company also estimates that the continued bad weather in 2014 will cost it between £70 and £90m in the home business alone, with a further £20m coming from comercial.

However, the company warned that the estimates were early. It said: “More certainty around the actual claims costs will be possible only once flood waters have receded.”

Commercial boost

Despite incurring £20m of weather related claims in the year, Direct Line Group’s commercial division quadrupled its operating profit to £9.5m (2012: £2.2m).

The division is still making an underwriting loss: Its 2013 COR was 106.8%. However this is 1.4 points better than 2012’s 108.2%.

The company said its commercial COR would have been 104% excluding the weather claims, and added that the unit continues to enjoy “significant reserve releases”.

Direct Line Group is targeting a commercial COR below 100% for 2014.

Retiring Deloitte partner Ian Clark joins Gallagher

Arthur J Gallagher has hired Deloitte Partner Ian Clark as a strategic business consultant to its UK and international operations.

Clark, who has led Deloitte’s mergers and acquisitions (M&A) and strategy practice for the past 10 years, will retire from the consultancy this Friday after 24 years as a partner at Deloitte and its predecessor firms.

He has expertise in London market and specialty insurance and reinsurance, as well as UK commercial and personal lines business.

Gallagher said Clark will support its management in the setting and execution of its broking and underwriting strategy.

Arthur J Gallagher International chief executive David Ross said: “Having previously led a strategic review of our business and advised on subsequent acquisitions, Ian is uniquely qualified to assist us in realising our UK and international ambitions.

“His decades-long deep industry insight will be invaluable and a fantastic complement to our internal expertise and entrepreneurial vigour.

“As we look to consolidate our position as a top three UK retail broker and build out our footprint in rapidly emerging economies, the shape of our operations changes by necessity requiring further strategic insight. Ian is exactly the right person to provide that.”

Clark added: “I’m delighted to have the opportunity to continue working alongside David and the senior management team with their unshakeable focus on delivering profitable growth right across Arthur J. Gallagher’s UK and international broking and underwriting operations.”


Digital transformation is key to profitability – report

Digital channels, especially mobile, are the greatest tools for insurers to increase profits and retain customers, according to The World Insurance Report 2014 released today.

Firms that embrace a top-down digital transformation with a customer focus are 26% more profitable on average, it found.

The report, by consultancy Capgemini and not-for-profit Efma, also predicts that nearly one-third of insurers’ business will occur digitally within five years – 20% coming via online channels and nearly 11% via mobile.

Key areas for insurers to focus on include multi-channel integration, maximising social media and taking advantage of predictive analytics techniques, the report said.

Capgemini Global Finance Services chief sales and marketing officer Jean Lassignardie said: “Insurers who master both digital delivery capabilities and online services across different stages of the insurance life-cycle, especially claims payouts or policy acquisition where customers expressed needs for improvement, will gain the greatest competitive advantages.

“Mobile holds the greatest potential to move customers toward more profitable behaviour. Insurers dedicated to providing a positive customer experience via mobile will position themselves well to improve business performance.”

The report also found that only 32% of insurance customers globally reported having positive customer experiences with their insurer in 2013.

Its customer experience index, which analyses responses from more than 15,500 insurance customers, found that customers who have positive experiences are twice as likely to make referrals and 50% more likely to make additional purchases.

Efma secretary general Patrick Desmarès said: “Consistent, positive experience will help create a customer base that is loyal and ultimately more profitable.”

According to Cagemini’s Voice of the Customer survey, digital improvements are most needed in the areas of claims servicing, claims payouts, and policy acquisition.

The report also reveals that agents are still the main channel for driving customer experience, followed by the internet and mobile. The preference for digital channels over traditional is highest among young customers (aged 18 to 34), particularly in emerging markets of the developing Asia-Pacific and Latin America.


Swinton launches £7.5m television ad campaign

Decision marks return to TV after seven-year absence.

Swinton Insurance has confirmed the launch of a new £7.5m television advertising campaign, starting with a slot during Coronation Street on 3 March.

The total spend, £100,000 more than the £7.4m the high street broker was fined by the Financial Conduct Authority last year for mis-selling add-on products to customers, is “in support of its transformation programme”.

The campaign will be the first time since 2007 that Swinton has advertised on television, and will be supported by print adverts in the national media and an online display and social campaign.
The broker has also changed its logo as part of the process.

The motor and home-focused advert will feature 2013 Britain’s Got Talent winners, Attraction.

Gerald McLarnon, marketing director at Swinton, said: “We have chosen to return to commercial television to promote Swinton’s people-centred approach – highlighting that the Swinton personal touch differentiates us in the UK.

“Through the use of Attraction’s amazing creative talent we’ve brought our brand essence to life and this campaign also reflects a wider transformation of our business which we are really excited about.”


Direct Line enjoys 70% post-tax profit surge for 2013

Insurer sees 2013 profit jump to £312.8m from the £184.3m recorded for 2012.

Direct Line Group (DLG) has reported a 14.2% rise in operating profit for 2013 to £562.5m (2012: £461.2m), with pre-tax profits up at £423.9m (2012: £249.1m).

The insurer also revealed that post-tax profit surged by 70% to £312.8m for the year compared to the £184.3m posted for 2012.

DLG’s combined operating ratio (COR) also beat its 2013 target of 98%, coming in at 96.1%, an improvement on the 99.2% registered in the previous 12 months.

The provider attributed this COR improvement to a “higher than expected” prior-year reserve releases of 12.4 percentage points.

Meanwhile, gross written premium (GWP) edged down slightly to £3.8bn from £4bn.

DLG, which also owns NIG and Direct Line for Business, saw the number of in-force commercial policies bump up to 583,000 from 466,000.

Commercial GWP for 2013 also rose to £474.5m from 2012’s £425.6m.

And the commercial division saw its COR improve to 106.8% from 108.2%, which DLG stated was “principally as a result of better underlying underwriting performance and a lower commission and expense ratio”.

Paul Geddes, DLG CEO, said: “We have continued to make good progress on our strategic priorities, helping us to achieve our 2013 financial targets in highly competitive markets.

“In UK motor, our improved pricing capability and claims management, as well as benefits arising from recent legal reforms, enabled us to reduce average prices for customers by 3% during 2013.

“In home, recent UK weather events have emphasised the importance of insurance.”