TODAY’S BLOG
AS SAFE AS HOUSES
I am not really sure what the reason is, but most people trust their own bank. I guess that a degree of trust has to be there in order for you to agree to bank with them. However, there is a huge amount of inertia when it comes to banking. I don’t know if it is still the case but not so long ago a bank customer was more likely to leave their marriage than the leave the bank.
On 8 July 2021 the regulator concluded yet another investigation and disciplinary action against the Bank with the horse (again). This is prone to jokes about stable doors and a few about the long face. This time house insurance sales. Those awkward hassle reminder letters that tell you its time to renew.
I’m stretching a little, but I am basing my own assumptions on the statements made by the FCA. Long story short, loyal customers were not getting deals they thought were good and there was never any real attempt to compare just how wonderful the cost of insurance was against others. This all happened a few years ago… back in 2017 the home insurance market of 18 million policies and 12.29% of those with Lloyds Bank General Insurance. I make that about 2.2m policies. The premiums paid to Lloyds amounted to a tidy £713m… so that’s an average premium of about £336.
BOLTING THE STABLE DOOR
In fairness to Lloyds they have already repaid customers £13.5m. The FCA have fined Lloyds £90,688,400 due to the misleading renewal and marketing literature, of which there were over 9m “renewal communications” between January 2009 and November 2017. So the problem went on for 8 years and its nearly 5 years after period concerned that a fine has been issued. There really is something about stables, horses and bolting here isn’t there?
Is it just me or is this about 2.2m polices sold each year since 2009… 12 years of premiums or about £8,556m for a £90m fine. It’s about 1% of premiums over those 12 years. Fair enough I am extrapolating the data, but I doubt its far off.
May I make a suggestion? Do not use your Bank for your insurance, or indeed anything other than banking. We see this sort of stuff on a regular basis, yet people remain loyal to their Banks. Use an insurance broker who will assess the market. I use Richard Hiscox at 1Stop. The main advantage is that price competition is part of the issue, the other is whether claims themselves ever get paid out easily with minimal fuss. This experience is something most of us have little of (thankfully) but an insurance broker sees this stuff every single week.
Dominic Thomas
Solomons IFA
You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk
GET IN TOUCH
Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT
Email – info@solomonsifa.co.uk
Call – 020 8542 8084
GET IN TOUCH
Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT
Email – info@solomonsifa.co.uk Call – 020 8542 8084