UK insurance group Aviva puts its US business on the block

UK insurance major Aviva Plc (LON:AV) is gearing for a sale of its US business after receiving several unsolicited approaches from trade buyers and private equity groups, the Sunday Telegraph reported without specifying its sources.

According to the UK newspaper, Aviva’s finance chief Pat Regan has spent quite a while in Des Moines, Iowa – the city where Aviva USA’s headquarters are located – to make preparations for the sale and launch the process. An investment bank is yet to be formally appointed but Aviva’s executives are believed to have settled on Goldman Sachs Group Inc (NYSE:GS) as manager of the sale.

Aviva agreed to pay GBP1.8bn (USD2.8bn/EUR2.3bn) in mid-2006 for what was then called AmerUs, combining it with its existing US business to create Aviva USA. The sale of the business is expected to leave the UK company with a loss of GBP800m on its initial investment since the division is now estimated to be worth GBP1bn, the Sunday Telegraph said.

Following shareholder pressure, Andrew Moss stepped down as chief executive of Aviva in May, leaving newly appointed executive chairman John McFarlane to fill the gap on a temporary basis.

Earlier in July, McFarlane presented his plan for a strategic overhaul of the company, saying that 16 out of 58 businesses have been designated non-core and will either be sold or shut down. However, Aviva could not be drawn into commenting at the time on whether its US division was one of those businesses.

The company has already pulled out of Hungary, Romania, the Czech Republic and Australia and is set to exit Taiwan as well, selling its 49% stake in its local joint venture.

The Sunday Telegraph was unable to extract a comment from an Aviva spokesman with regard to the US divestment.

UK insurance firm Aviva sells more Delta Lloyd shares due to strong demand

British insurer Aviva Plc (LON:AV), a 41.3%-owner of Delta Lloyd NV (AMS:DL), will sell 37m shares of the Dutch insurance firm, more than initially planned, due to favourable demand from investors, Delta Lloyd said.

Aviva, which originally wanted to sell 25m Delta Lloyd shares, representing 14% of its ordinary share capital and 14% of the votes, to institutional investors, raised that volume to 21% of the Dutch group’s share capital and 20% of its voting rights.

The Delta Lloyd stock will be sold through an accelerated book-building with the price to be decided by that process, the Dutch insurer said.

Aviva, which after this disposal will be left with 34m Delta Lloyd ordinary shares accounting for nearly 20% of the target’s capital and 19% of its votes, has pledged to keep its remaining interested in the Dutch insurance group for 180 days following the completion of this deal.

Delta Lloyd, providing life insurance and general insurance, as well as asset management and banking products and services, is focused on markets in the Netherlands and Belgium. In the Netherlands it is present under the brand names Delta Lloyd, OHRA and ABN AMRO Insurance, while in Belgium it operates as Delta Lloyd. The group has 5,401 permanent employees.

British Aviva has more than 43m customers for its long-term insurance and savings, general and health insurance and fund management products and services. Its divisions cover markets in the UK, Europe, North America and Asia Pacific.

The decline of the family saloon

How ‘Fiesta Dad’ and ‘MPV Mum’ have changed Britain’s driveways since the 1980s.
The demise of the family saloon, once the bastion of Britain’s family cars, has been driven by the rise of small-car dad and MPV mum, according to research released today by the UK’s largest insurer Aviva.

In the 1980s the stereotypical two-car family had a large saloon, like a Ford Cortina or Vauxhall Cavalier, and a small ‘runaround’ second car such as a Fiesta or a Datsun Cherry on the driveway1. The women in the family almost always drove the smaller car.

Fast-forward to today and the shape and size of the cars on our driveways and who is driving them have changed significantly.

Aviva asked 2,500 UK adults about their family car history stretching back 30 years and found that, while more families than ever own a second car2, there has been a significant shift towards a more equal size and value split between the cars driven by mum and dad in Britain’s multi-car households.

The death of the saloon
High spec smaller family cars, such as the Volkswagen Golf, the Mini and the Peugeot 207, driven equally by men and women, now dominate the top 10 most popular cars, replacing traditional family saloons like the Vauxhall Vectra, Volkswagen Passat and Ford Mondeo. The traditional family saloon no longer features anywhere in the top 10 list of most popular car models with UK drivers.
The rise of ‘Fiesta dad’ and ‘MPV mum’
As the size and shape of Britain’s family cars have changed so have the people driving them. In the 1980s, large saloons like the Ford Cortina and the Vauxhall Cavalier were popular with men but driven by very few women, who drove mainly small cars such as Fiestas, Minis, and the Sunny and Cherry made by Datsun/Nissan.

Since 2010 the big car/small car gender divide had changed completely. Two thirds of Fiesta drivers are now men. Women are increasingly opting for large, modern alternatives, and are more likely than men to drive big SUV and 4×4 hybrids such as the Citroen Picasso and the Toyota RAV4.

The evolution of the family car
In the 1980s Britain’s family cars looked very similar, with just four big and small car combinations dominating our driveways. Vauxhall and Ford were the most popular saloons of choice. The four pairings most commonly seen in streets across Britain were: the Vauxhall Cavalier/Mini Rover; the Vauxhall Cavalier/Ford Fiesta; the Ford Cortina/Mini Rover and the Ford Escort/Vauxhall Nova4.

In 2011 the picture is more complicated because of the huge rise in the number of different models available. Our driveways may have become more diverse but the type of car parked on them tells a common story. As motoring costs increase and with greater demand for fuel efficiency, families are increasingly opting for two small cars or a small car and an MPV hybrid. The most common car type combinations in 2011 were Small Family Cars (VW Golf, Ford Focus, Vauxhall Astra) with Mini/Compact cars (Ford Fiesta, Renault Clio, Vauxhall Corsa) and SUVs/4x4s/MPV (Nissan Qashqai, Citreon Picasso, Ford Galaxy) with Mini/Compact cars (Ford Fiesta, Renault Clio, Vauxhall Corsa)5.

Commenting on the research, Heather Smith, director of car insurance at Aviva, said: “Thirty years ago the big saloon and the small ‘runaround’ sitting side by side outside Britain’s family homes was a ubiquitous sight. Now you’re more likely to see two VW Golfs or newer SUV/4×4 hybrids like the Nissan Qashqai and the Suzuki Grand Vitara sharing driveway space.

“As families’ lives become more busy and complex, with two working parents and children to be dropped off at school, it appears multi-tasking mums need a vehicle fit for both work and family life while cost and fuel efficiency are increasingly important to dad”.

Insurers propose driving ban for under-25s

The Association of British Insurers (ABI) has stated that drivers under the age of 25 should hold their license for two years before being able to drive between the hours of 11pm and 4am, however allowing certain exemptions such as work.

 

The ABI have also said in their proposed changes that young drivers shouldn’t drink any alcohol before taking to the wheel.

 

Added changes include a minimum learning period of a year before being able to take their driving test, and scrapping intensive driving courses.

 

The ABI believe these new changes will lower the amount of young drivers involved in serious injuries on the road and death from road accidents.

 

Drivers under the age of 25 are twice as likely to fail a breathalyser test and when driving late at night and early in the morning are more at risk.

 

Statistics show that one in four people killed or seriously injured in a road accident is a young driver or one of their passengers. However only 12 per cent of all driving license holders are under 25.

 

Nick Starling, ABI’s director of general insurance and health said: “Our proposals are not designed to drive young drivers off the road, but to ensure that they become safer drivers”.

 

“We must act to reduce the tragic loss of young lives on our roads”.

 

AA insurance have welcomes ABI plans to tackle the number of injuries and deaths on the roads, however disagree with a ban on night time driving or a zero-tolerance alcohol limit.

 

Simon Douglas, director of AA insurance said: “While we welcome the debate, the suggested night driving ban up to age 25 is just not practical”.

 

The AA instead said it would be better to reduce the drink-drive limit for everyone.

 

The insurance company have agreed with the ABI that telematic or ‘black box’ insurance can also help to place responsibility for driving within the law. Technology is used to measure driving performance including speed, braking and cornering.

 

In the New Year the AA is expected to launch telematics insurance, which will be aimed at new drivers.

 

Article by Charlotte Greenhalgh

Young Drivers Hit With £4,000 Average Car Insurance Cost

This is the first time since the Confused.com/Towers Watson Car Insurance Price Index began in 2006 that average annual car insurance costs for young men have exceeded £4,000.

Bizarrely, young male drivers in this age bracket see their car insurance costs reduce by around £1,000 if the driver is married and adds their partner to the policy.

In order to afford a £4,000 a year premium and cover the cost of running a car, the average single male would need to spend £6,500 a year – almost half of the average salary of full-time employees at this age. This effectively prices them out of the market.

Gareth Kloet, Head of Car Insurance for Confused.com commented: “For young male drivers it has never been more important to shop around for the best price. Our consumer research shows that 50% of under 25s could save up to £556 on car insurance* by using Confused.com. This is one way to help combat these rises.”

The news isn’t only bad for young drivers though. The average cost of a comprehensive car insurance policy across the UK stands at £858 (as of the end of June 2011), marking a year on year rise of £170.

Despite the huge increase in the last twelve months, prices are still continuing to rise. In Q2 of 2011, prices inflated by an average of 25% compared to Q2 2010.

Statistics from Quarter 2 of 2011 tell us that:
* The average cost of comprehensive cover in the UK is now £858, up £22 in the last 3 months and up £170 in the last 12 months.
* The annual rate of price inflation for comprehensive cover is now 25%.
* The average price of a comprehensive policy increased 2.7% across the UK in Q2, with drivers in Northern Ireland hit hardest with a 5.1% increase.

* The average price of a comprehensive car insurance policy rose by 2.7% in the second quarter of 2011, the fourth consecutive quarter in which price rises have been less than in the previous quarter.
* Third party, fire and theft (TPFT) cover increased the least in Q2 by just 1%, but the cost a TPFT policy is still up 33% in the last year.
* The biggest increases this quarter have been seen among the 29-33 year old age group.

Over 4 million quotes are used in the construction of each quarter’s insurance price index – this makes it the most comprehensive insurance index in the UK.

^Office for National Statistics, Annual Survey of Hours and Earnings 2010; average wage of full-time employed 16-21 year olds is £14,833
*Based on online independent research, Consumer Intelligence (June ’11). 50% of consumers, aged 17 – 25, could achieve this saving.

Festival Goers Urged to Check Home Insurance Policy

With the Music Festival season upon us… Download, and the Isle of White festival’s have already been and gone. But fear not still to come are Glastonbury, Reading and Leeds, and V festival!

Swinton Insurance is offering a word of warning for festival goers to make sure they have their personal possessions covered on their home insurance policy.

Swinton, the UK’s leading high street retailer of home insurance, surveyed 2,200 customers and found that 37% of regular Festival goers take valuable possessions to festivals but only 11% of this percentage would make sure their items were insured.

Swinton also found that just over 7% of festival goers had had items stolen from their tents and campervans. A further 11% had lost or damaged items themselves whilst camping at festivals.

As theft, loss and damage of possessions is common at festivals, Swinton is advising customers to check what items are currently covered on their contents insurance policy before they take their valuables away. If customers do require any additional cover for personal items, they can easily add them to their existing home insurance policy.

Steve Chelton, Insurance Development Manager at Swinton said, “It’s important that festival goers try and be on their guard for opportunistic thieves who, unfortunately, target these sorts of events. Tents are often left unguarded for long periods of time, so we advise people to keep valuables on them at all times. We also advise adding any valuable possessions to their home insurance policy if they plan to take them to festivals.”


Top 10 Insurance Scams

Many customers across the UK have been scammed into buying payment protection policies. The Financial Services Authority expressed concern that thousands of Brits have been mis sold payment protection insurance and because of this, the high street banks must now shell out millions of pounds in compensation pay-outs to its customers.

Fraud and insurance scams costs the UK £30.5 billion a year and dishonest insurance claims alone cost around £2 billion a year which adds an extra £44 per year to every household’s general insurance budget.

As consumers up and down the country seek to get their money back which was wrongly taken, the PPI Claims Company can reveal the top insurance scams that have caught media headlines for being daft and those dodgy cons that have failed.

‘Cash for crash’

In April 2011 39 members of a Luton gang were involved in a £5.3 million ‘cash for crash’ insurance scam; the largest fraud ring the industry has ever seen.

cash for crash

The case, called Operation Exhort, involved a five year investigation by Bedfordshire Police and three defendants from the criminal enterprise resulted in being jailed. A further 33 defendants pleaded guilty to a variety of offences in connection to the insurance scam.

 

Law graduates accuse Brazil of mugging


In August 2009 two law grads scamBritish law graduates confessed to a false insurance scam in Brazil in which they claimed they were robbed.

Graduates Shanti Andrews and Rebecca Turner claimed they were mugged of their laptop, purse, mobile phone and digital camera during a bus journey in Brazil to pocket an insurance pay-out.

But the 23 year-olds later went on trial and admitted to charges of attempted insurance fraud. The pair were sentenced to community service and fined £3,900.

 

Fraudster shot himself as part of a string of scams

fraudster scam

In March 2011, an insurance fraudster shot himself in the chest to claim money in compensation. It was only after he confessed that he was the gunman, that it was revealed he has created a string of scams over the past 16 years.

In 1995 he claimed to have been shot by an air rifle and won £2,500 in compensation; in 2004 he won £1,750 after claiming he had been accidently stabbed by a family member; and in 2006 he received £5,600 after falsely claiming he had slipped in a public toilet in Corwen, in Wales.

Amateur footballer scammed insurer out millions

In April 2011 an unprofessional footballer was jailed for a year after trying to scam an insurer out of millions of pounds.footballer scam

James Shikell was involved in a car accident in 2002 and won £30,000 in compensation from the Motor Insurers’ Bureau. He claimed his injuries were so severe that he required a further £1.35 million in damages to cover loss of earnings and care costs but a private investigator filmed him playing a football game “vigorously and competitively”.

Shikell’s father was also sentenced for one year for his part in supporting the fraudulent claim and a footballing teammate was fined for making a false statement.

Canoe Man Disappears

In 2002, John “Cancanoe man scamoe” Darwin made headlines with the most outrageous insurance scam ever.  The father faked his own death in a canoe so his wife could claim £680,000 from pensions and insurance companies.

The 60 year-old conman was so desperate to wipe his crippling debts he decided to paddle to his ‘death’ and ‘drown’ at sea, resulting in a six-year jail sentence and the grief of his two sons.

 

Best pals stage car crash insurance scam

friends car crash scam

In July 2010, two pals staged a car crash to cheat an insurance company out of £11,400.

Best friends Katie Ashcroft, 24, and Jodie Jackman, 23, faked that they had been in an accident and arranged for a ‘Mr Fixit’ to crash their cars into each other before ringing their insurance companies to falsely claim.

Friends and family members pretended to be passengers in the cars and filed fake injury claims. The scam was only exposed when emails between the pair were found.

OAPs kill homeless men to collect millions in life insurance

Some pensioners from California, America were convicted in 2008 in a murder scam.

oaps scam

The OAPs, Helen Golay (73) and Olga Rutterschmidt (50) were put behind bars after killing two homeless men and collecting millions of pounds in life insurance.

Golay was found guilty of the murders in 1999 and in 2005 and sentenced to a life sentence; whereas her accomplice was convicted of conspiring to murder for financial gain.  The trial was known as the trial of the Black Widows.

Conman shattered girlfriend’s leg for £100k compensation

conman scamIn 2007 a conman deliberately broke his girlfriend’s leg to claim £100,000 insurance.

Gordon Thomon, 32, left his fiancée Elizabeth Hingston, 24, in agonising pain in a sick stunt that involved him putting a brick under her left limb and jump on it with both feet.

The pair planned to sue the council and claim a wall had fallen on her as part of the bogus scam but were rumbled when the scheme was filmed on a mobile phone.

Thomson pleaded guilty to causing grievous bodily harm with intent.

Eight People Convicted Over Motor Scam Worth Thousands

In April 2011, emotor scamight people were convicted for their part in a car insurance fraud scam worth tens of thousands of pounds.

 

Five men and three women were sentenced at Leicester Crown Court following an investigation into fraudulent claims related to damage and injuries resulting from four collisions in Leicester and Birmingham.

The ringleader, who was involved in setting up one of the false collisions, even set up a fraudulent claims company as part of the scam. The conspirators netted nearly £50,000 which would have doubled had the police not rumbled the scheme.

Doctor accused of involvement in £4 million insurance fraud case

In April 2011, a GP doctor in Harrow, Great London appeared before a trial accused of fraud estimadoctor scamted to total around £4 million.

Dr Lawrence Martin Adler, of Belmont Health Care, has been alleged of being involved in “after the event” insurance claims relating to personal injury accidents.

The 58-year-old appeared at Southwark Crown Court alongside five other defendants, a solicitor and insurance workers as part of an on-going investigation.

Young drivers priced out of cars… and on to bikes

Young drivers are being increasingly priced off the roads as rising fuel and insurance costs put car ownership out of reach for many teenagers.

New figures from the Driving Standards Agency show that the number of 17-year-olds taking driving tests has fallen by more than 55,000 in the past three years.

And many people priced out of running a car are looking to motorcycling, with a 17 per cent increase in the number of people taking CBT (compulsory basic training) courses in the past year, according to industry group Get On.
Campaign director Miles Taylor said that “more and more people are looking at the cost of driving a car for a year and seeing they can save thousands of pounds by riding a motorcycle instead, particularly a 125cc model.”

“This sector of the market is currently almost 25 per cent up on last year, with scooters up 30 per cent.”

Taylor said that opting for a motorcycle should be a no-brainer for many who wanted to maintain their transport independence, particularly youngsters at university facing increased tuition fees and rental costs.

Get On provides free riding sessions to give potential motorcyclists a taste of life on two wheels, and Taylor said: “There is a strong interest in bookings from young people and we would encourage them to look at motorcycling as an affordable form of personal transport.”
In the past year, drivers have been hit by an average 40 per cent increase in car insurance premiums combined with record fuel costs, up an average of 15.43p a litre compared to a year ago.

Newly-qualified drivers can face premiums of up to £6000 a year.

Against this background, the number of 17-year-olds taking a driving test has fallen nearly 15 per cent from 384,571 in 2007/8 to 329,307 in the year ending March 2011, the steepest falls coming in the past two years.

In contrast, the number of people taking motorcycle tests increased from 68,792 to 105,362 in the decade up to March 2009.
Robert Balls, of specialist motorcycle broker Bikesure, said the days when youngsters could put themselves on mum and dad’s policy as an “occasional” driver were over, with insurers wising up to a practice known as fronting.
“People keen on getting their independence often used to ride a motorcycle for a few months before they passed their driving test and got their own car at the age of 17 or 18,” he added.

“But we are seeing more people sticking with their motorcycles, or even selling their cars and coming back to bikes.

“The premium for a 125cc motorcycle is often less than a quarter of that for a car, and when you add in lower fuel costs and cheaper road tax you can see the temptation of sticking with two wheels.

“For example, a 17-year-old can insure a 125cc bike for about £400, whereas a car might cost 10 times that, and for some teenagers that’s the only way they can afford their own transport, even if they have passed their driving test.”

Research by Get On shows a saving of over £4000 in the first year, and £3700 a year thereafter, for a new Honda CBR125R compared with a used Peugeot 306, based on a 19-year-old living in Birmingham.

“The Honda can do 158 miles per gallon, and even a BMW F650 can do 76mpg, while it costs £1000 on average just to learn to drive a car before you even think about insurance, but a CBT is, on average, just £125 and can be done in a day,” said Taylor.

“A lot of people whose incomes are being squeezed at the moment are clearly seeing the benefits.”

As for parents worried about the safety of two wheels, Taylor said: “Motorcycles are also a lot safer than they used to be, with features like ABS on many bikes, traction control on some and new modern tyres accident rates as a proportion of riders are coming down.
“Some people still have the perception that all motorcycles are fundamentally dangerous, but with better education of car drivers, the right training, equipment and rider attitude they can be a practical, economic form of transport. And great fun too!”

What’s so good about:

Motorbikes:

Fuel economy up to four times that of cars
Beat the rush by skipping through traffic jams – journey times typically 30 per cent faster
Significantly cheaper insurance and other running costs
One day to licence pass – with a CBT typically costing just £125 and not £990 for a car
Enjoy the freedom of being out in the open and make the most of the summer breeze
Better for the environment
It’s fun – bikers are happier commuters
You’ll never have to buy de-icer
You never have to clean out empty crisp packets, sweet wrappers or coffee cups
You never have to pick your gran up from the airport
Parking has never been easier
You’ll never need to buy an air freshener

Cars:

No helmet hair
You can take more than one passenger
There’s room for luggage, or the weekly shopping
Heating, air conditioning, a stereo and, of course, a roof
You can sleep in a car – and entertain guests…
You can drive backwards
Cup holders
You can’t fall off a car
Your dog can come for a drive with you

Insurers blacklist drivers based on postcode

 

Premiums are soaring as honest motorists foot the bill for the ‘fraud epidemic’ sweeping the country, which has lead to insurers secretly to blacklist certain postcodes.

Many car owners have seen a rise of up to forty per cent in insurance premiums over the past year, insurers are blaming an increase in fraudulent claims

An investigation has shown blacklisted areas of the UK where concentrations of fraudulent activity have taken place. These claims have lead some insurance companies to flat-out refuse some motorists insurnace in some areas.

The most popular fraudulent incidents include staged accidents, bogus injury claims and fronting, where parents claim they are the main driver for heir child’s car.

Top ten areas for fraudulent claims; Birmingham, Liverpool, Bradford, East London, Manchester, North London, Bolton, Blackburn, Southall and Oldham.

Birmingham tops the list with a staggering one in ten suspicious claims, with B8 – east Digbeth being one of the worst spots followed by B15 – Edgbaston

James Heath, head of counter fraud strategy at Keoghs, says: ‘We are now seeing what can reasonably be described as a fraud epidemic across the UK.

‘It is clear from these results that fraud is no longer restricted to the country’s most heavily built-up areas.’

See how your postcode affects your car and home insurance at www.thisismoney.co.uk/postcode