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 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 moneysupermarket.com, 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

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Deceitful Britons Risk Losing Out On Home Insurance Claims
Britons have been warned that their propensity to hide the true cost of their purchases from their loved ones could have implications for their home insurance policies.

A survey conducted by Halifax Home Insurance found around 25 per cent (8.5 million) men and women in the UK have lied to their partners about the values of some of the purchases they have made in the last year. As a result, many people are likely to be underinsured, Vicky Emmott, senior manager of underwriting at Halifax Home Insurance, has warned.

"Because of this secret spending, householders could find the contents in their home are underinsured if the person responsible for organising the policy is unaware of the true cost of items in the property," she said.

"Homeowners can seek to avoid this problem by purchasing unlimited contents insurance for their property. However, they will have to own up to the real cost of the items when claiming on their insurance policy."

According to Ms Emmott, men are most likely to lie about the cost of stereo systems and plasma TVs, while women are most culpable when it comes to shoes.

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British Gas Launches SME Comparison Website
British Gas is to hike up its position in the general insurance market with the launch of a new online comparison website for SME's.

Insurance for business, launched by British Gas Business, is designed to provide commercial insurance through a panels of insurers, including Norwich Union, Zurich, AXA, Groupama and Royal & SunAlliance.

The website, which went live last month (May, 2007) offers six commercial products: shops and retail, office and surgery, professional indemnity, home-based professional, general trade and construction and general small business insurance.

The company says it also intends to cross sell products such as central heating care and other associated products through the website. A spokesperson for the energy supplier said: "Branching into insurance is a natural progression for British Gas as with helping companies achieve energy efficiency." Last year the company renewed its push into household insurance.

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OFT Launches Scam-Busting Guides
The Office of Fair Trading has launched a series of interactive guides on scams to help people avoid being tricked into losing money. The three guides, available at http://www.oft.gov.uk/oft_at_work/consumer_initiatives/scams/scam-letters, explain fake prize draw, lottery and clairvoyant mailings. They show examples of what to beware of in scams that cost UK consumers 3.5 billion pounds each year.

For example, the guides illustrate how clairvoyant mailings use the recipient's name over and over again, and include printed sections that look like they have been handwritten when in fact the same letter has been sent to thousands of people. Christine Wade, assistant chief executive for Consumer Advice and Trading Standards, said: "Lottery, prize draw and clairvoyant scams can cause untold hurt and harm to the people who are deceived into responding.

"These guides show people the tricks that scammers regularly use and make it easier for people to protect themselves against scams." The research, conducted with 11,200 consumers, revealed that 3.2 million UK consumers lose an average of 70 pounds each year, although this figure can climb into the tens of thousands.

Source: Reuters UK

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Beware 'Biased' Switching Sites
Millions of consumers use price-comparison websites to search for the best deals on everything from car insurance to gas and electricity, 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, Confused.com, 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."

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Contactless Cards Coming to UK
The UK banking industry is announcing plans for the national introduction of contactless technology on credit and debit cards. Banks taking part in the initial phase in September 2007 include HSBC, Lloyds TSB, RBS, HBOS and Barclays. Available for transactions of £10 or under, customers will hold the upgraded cards against a reader at participating retailers.

The rollout, lead by Visa Europe and Mastercard, will start in the City of London and Canary Wharf in September and then expand across the capital before gradually going nationwide in 2008. The aim is to have issued five million contactless cards by the end of next year (2008) with 100,00 readers installed.

According to the industry body APACS, there are currently in excess of 20 billion payments under £10 in the UK with a face value of £200 billion per year so the market for the new cards is considerable.

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