The risks faced by the UK’s insurance industry have been highlighted in the first Prudential Risk Outlook (PRO) to be published by the Financial Services Authority (FSA).
The regulator says that UK life insurers continue to face a number of medium to long-term pressures on profitability, explaining: “In particular, while new business flows are reportedly positive (up around 5% in the first nine months of 2010), net cash flows for the sector (premium inflows less claims and surrenders) … have been negative since 2008.”
According to the study, increased annuity payouts as people retire, “persistently” subdued demand for long-term savings products, increased competition from other types of products, and the decline of products such as with-profits policies, are all to blame.
For general insurers, the PRO describes the sector as “well capitalised” but notes the need to focus on profitable underwriting, as investment income remains under pressure.
In addition, the Outlook states: “Claims inflation is likely to continue across general insurance lines … for example, although motor insurance premiums have risen by a third over the past 12 months, claims are estimated to be up 30% from 2009.”
Five key messages to insurers from the FSA are summarised in the PRO section B page 54.
Serious car accidents should always be reported to your insurance company. Fotolia.com”>
Even if you have never been involved in a car accident, chances are good that you may someday hit something with your car, or another driver may hit you. Accidents can be scary and may leave you confused and upset. Being prepared and knowing how and when to report an accident to your insurance company will help protect your rights to continue your auto insurance coverage and obtain reimbursement for your damages, if necessary.
Right Away
Although it isn’t usually necessary to report an accident right away, some insurance companies may encourage you to do so whenever possible.
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Insurers will soon be banned from using an applicant’s gender to determine the price of their policy, following a ruling from the European Court of Justice. From December 21, 2012, companies providing car insurance and other policies will no longer be allowed to factor in the sex of a potential customer, even if that makes them statistically more likely to claim.
One of the most obvious changes will be that women will no longer pay lower car insurance premiums than men.
Most commentators believe that men’s premiums will not fall by as much as women’s will rise. The British Insurance Brokers’ Association (BIBA) estimates that the ruling will mean women will typically pay up to 25% more for their cover.
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Trifords Limited, part of the Markerstudy Group, has acquired from the liquidators of Auto Windscreens certain trading assets, including the right to use the trading style “Auto Windscreens”.
The new owners of the brand have confirmed that 250 jobs will be created as a result of the acquisition, which includes three freehold sites, one of which is the former Auto Windscreen head office building in Chesterfield.
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A supplemental annuity plan is a tax-deferred annuity bought through financial advisers licensed for state life insurance sales. The deferred annuity doesn’t reduce annual income based on contributions; there is no contribution limit. Earnings grow without tax consequence until taken out. The withdrawal of an annuity is also referred to as a distribution or surrender.
IRS Regulations
The IRS regulates the taxation of deferred annuities. Normal distributions from these financial products follow the same guidelines as Individual Retirement Accounts, 401k or 403b plans. You must reach age 59 1/2 for normal distribution eligibility.
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— Tomas Craft @ 11:33 am — 
March 18, 2011