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UK Financial and Insurance Update, June 2007

June 2007

Green Deals mean no more Guilt Trips
Insurers are fast getting onboard the green bandwagon by offering policies which either plough money into green schemes or encourage motorists to stop emitting quite as much noxious fumes.

Ibuyeco, an “environmentally-friendly” brand distributed by Budget Car Insurance, launches this month (June, 2007) giving drivers the opportunity to fund wind farms in southern India or back a group which pays to distribute fluorescent light bulbs in Jamaica.

The insurer’s programme works in a similar way to other schemes. When you apply, the underwriter will assess the amount of CO2 you are emitting into the atmosphere as you drive. Factors such as the number of miles usually driven and the size of car and engine will determine your “carbon emissions offsetting” fee. At Ibuyeco these range from around £15 to £25 a year and this is invested with the Carbon Neutral Company, a profit-making group that pumps money into a range of environmental projects.

More Than, Royal & Sun’s retail insurer, The Co-op and Climate Care also either offer some sort of carbon-offsetting insurance, which transfers a portion of your premium to environmental charities, or give discounts on premiums of as much as 15 per cent to drivers with eco-friendly “hybrid” cars such as the Toyota Prius.

Altruism comes at a cost, however. These schemes tend to be more expensive than the traditional standards. A 35-year-old man in Birmingham with a five-year no claims discount who drives 10,000 miles a year in a Ford Focus 1.6 Zetec would pay a premium of £428.49 for an Ibuyeco policy with a £250 excess, according to, the price comparison website. A similar policy with a lower excess limit of £200 that does not offset your car’s carbon emissions, is available for the same man for £348.19 from AUTOdirect.

Source: Financial Times


Beware 'Biased' Switching Sites
Millions of consumers use price-comparison websites to search for the best deals on everything from car insurance quote, but their impartiality has come under question after it emerged that some plan to charge firms to be included in their best-buy tables.

The websites, which are supposed to scan the Internet to find the best financial or energy deals, have soared in popularity over recent years. More than 15m people used a comparison website last month (May 2007), thinking it would help save them money, according to Comscore, an Internet analyst.

However,, one of Britain's largest comparison websites specialising in insurance, has come under fire after it said it would only include in its tables companies that pay a monthly fee. The firm, part of insurance group Admiral, said that from next month (July 2007) it will charge any insurance company wishing to be included in its comparison tables between £7,500 and £15,000 per month.

Consumer groups are concerned that many firms will refuse to pay the fee, skewing the information provided, meaning that consumers miss out on the top deals. James Davey of Norwich Union said it was considering whether to pay the fee. He said: "We're the country's biggest insurer but we've not yet decided if we want to accept this charge. Smaller insurers are likely to be even less keen."

Lawrence Trim of insurer Swiftcover said: "Comparison websites are so powerful because they have as wide a selection of firms on their sites as possible. If some remove themselves from Confused because of the higher fee it will seriously undermine its credibility."