News Review: General Insurance
Don’t be afraid to be positive by
Jason Berry, head of
distribution and strategy, Safe & Secure
It’s been five years since the run on Northern Rock, largely seen as the start of the credit crunch and yet the constant bank bashing in the national and consumer press continues. Of course in some cases
the criticism levelled at the industry, especially in terms of some lenders, is fair. How- ever, the bashing does not stay restricted to rogue lenders. Indeed, we’re all well
aware that the criticism aimed at the lending indus- try has seeped into every sector in financial services – including the adviser sec- tor. Brokers and IFAs have all been tarred with the same brush as rogue bankers and confidence in the industry is clearly low. What’s even more frustrat-
ing about the negative press financial services receives is the media seems to refuse to
report on any good news or positive work in the market. But herein lies an oppor-
tunity. Rather than become downhearted or get lost in self-pity, lenders and inter- mediaries should work to- gether as a partnership to overcome the negativity the press seems keen to convey. And they have at their disposal a host of facts that serve to demonstrate the positive actions that nobody seems to give the industry credit for. For example, final 2011
figures from the Council of Mortgage Lenders show lending was up and is likely to continue rising. The data showed gross mortgage lending reached £139.9bn, up from £136.3bn in 2010 and £1.8 billion higher than the trade body had forecast earlier that year. Brokers should also feel
proud their personal ef- forts helped boost mortgage lending via the intermediary channel against the retail al- ternative to a level which was much better than expected. Some lenders continue to
show great performance with Nationwide’s six monthly figures increasing by 48% for gross mortgage lending. Its recent six month results also showed the building society did gross mortgage lending of £8.9bn compared to the £6bn it lent over the same period in 2010. Yes, the press have been
firing on all cylinders and it’s been easy to feel hard done by. Increased regula- tion just seems to be another attack on the financial ser- vices market but we have to be positive. We must accept a new regulatory regime is coming but realise opportu- nities will be there to engage effectively with the regulator, using trade bodies like AMI or compliance-focussed por- tals like
Tcfnfo.co.uk to get our voices heard. The regu- lator knows mistakes have been made and will listen. So while it’s been tough
and, even the most optimis- tic amongst us would have to concede the hard times are far from over, intermediaries must pick out and then pro- mote the positives.
News in brief
• Good luck to my old Plat- form colleagues who recently entered into a consultation period. Led excellently by Da- vid Tweedy this company, al- though not immune to credit crunch events, has delivered sensible specialist and, more recently, mainstream lending to the UK marketplace. The tough times faced by us all are sadly taking their toll but I wish David and his team well and know we will see them successful in new roles sooner rather than later.
• I see that the latest reports suggest up to £75k discounts may be available under the revamped Right to Buy scheme. These loans have historically performed well for lenders and created many new homeowners, particular- ly in the south and southeast, who would otherwise forever have rented. I urge lenders to get behind the scheme with competitive product offers. The niche area will attract intermediary interest and deliver low risk and good returns.
Insurers are still paying claims in tough times
On the subject of positiv- ity, it was interesting to hear George Osborne recently comment to the Associa- tion of British Insurers that: “Insurers are not commu- nicating their resilience”. The inference clearly being that insurers were “missing a trick”. A couple of areas stand out
for me. It may not have been well publicised but, despite challenging economies, in
www.mortgageintroducer.com
“Let’s hope the regulatory requirements imposed on the insurance industry do not change some positive trends”
2011 over $100bn was paid out in global claims which were linked to natural disas- ters.
Also, if we look at indi-
vidual insurance companies, unlike banking, only AIG has had to be bailed out and that was due to issues cre- ated by its “non-insurance” business. Let’s hope the important regulatory requirements im- posed on the insurance in-
dustry do not change some positive trends. There is a real danger requirements from the Retail Distribution Review and Solvency II lead to mountains of data and subsequently some good businesses lose their com- mercial focus. Indeed at a time when strength and resilience is most needed some com- monsense regulation has never been required more.
MORTGAGE INTRODUCER APRIL 2012 17
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