Aviva’s cheap life insurance business is not so attractive to RSA.

RSA is on the hunt for Aviva’s non life insurance business, but it’s no deal as the Board of the Norwich Union (as it was formerly known) say think again.

The RSA bid for Aviva’s non life insurance business is worth around £5 billion cash, but directors of Aviva have given the offer the cold shoulder, saying that the business is worth far more. RSA is not after the cheap life insurance business.

RSA is after Aviva’s general insurance business which has operations in Canada, Ireland and the UK. But the bid does not include the breakdown motoring organisation the RAC, or Health.

The small print of the RSA deal included a provision which meant that Aviva would have been left with the pension liabilities of not only the Health business, but also the general insurance businesses of the operations in France, Italy, Netherlands, Poland, Singapore and Turkey.

The offer from RSA did little to impress Aviva, although the City of London is now awash with thoughts that it’s about time the super insurance group was broken up to maximise shareholder value.

Aviva doesn’t agree and was vociferous in its defence, pointing that the highest shareholder value would be kept by keeping the businesses targeted by RSA within the same group.

The Aviva Board backed up their view with a number of assertions as to the strength of the current business.

Not least that a recent review had revealed that having both Life and Non-Life businesses is the best way to deliver significant capital and earnings benefits. Also, that there are further cost saving synergies to be realised over the short to medium term.

But, as always, it comes down to filthy lucre and RSA, as always with such bids, is bidding low to entice investors and will only reveal its true bid as matters develop.

Aviva is basically saying that RSA is not digging deep enough into its pocket for a business that not only has a dominate market position, but one that also has superb future potential.

To this end, Aviva is reminding RSA, and the City at large, that it is not only the leading general insurance business in the UK and Ireland, but it is the number two player in Canada. Given that, it should be valued accordingly.

What’s more, Aviva contends that the insurance sector is at its lowest point for years and RSA is making a bid at the bottom of the cycle which does not reflect the businesses true earnings potential. They cite the example that in 2006 operating profits of £1.7 billion were lodged in 2006, whereas it had fallen back to £1 billion last year.

Aviva believe that to sell its general businesses now for £5 billion, would be a travesty.

The howls of protest were led by Lord Sharman, the Chairman of Aviva, who said:
“The Aviva Board considered RSA’s proposal carefully with a clear focus on maximising value for Aviva shareholders. Given the compelling strategic and financial benefits to Aviva shareholders of retaining the GI business, its upside potential and the terms offered by RSA, the Board was unanimous in rejecting this proposal.”

Andrew Moss, the Aviva chief executive, weighed in with:
“The progress we’re making in reshaping and transforming Aviva was evident in the 21% increase to £1.27 billion of operating profits at our interim results and we firmly believe this strategy will continue to deliver superior value for our shareholders.”

But whether the RSA gets their hands on the Aviva non life insurance business, leaving it with the cheap life insurance business, will not rest with the directors of the target company. It’s the big fund managers who control large chunks of Aviva stock that will ultimately decide who gets the prize. But RSA will have to pump up their bid a way before any sale might be agreed.

Guest Article by Neil Camp

The Engage Mutual Insurance company has released a report that says men whine more than woman when it comes to aches and pains.

This may be no surprise to most women in the UK, but it appears to have shocked this mutual insurance company into publishing the results of their new research.

One of the staggering conclusions reached by the mutual insurance company conducting the research is that although women like to complain about minor problems on a daily basis, men actually feel more sorry for themselves when they become ill. Ground shattering results.

The mutual insurance company questioned around 3,000 poor souls and discovered that over 50% of all the men exaggerate the symptoms of their illness. They may get ill less than women (five times compared to females seven times), but once they are ill, they tend to become music hall actors and ham the whole experience up. Thus flu becomes a cold, a headache become a migraine and a stomach ache becomes death (only joking on the last point).

What’s more, the mutual insurance company says that nearly 60% of men seek attention when ill, whilst a whopping 65% constantly groan and moan. But even though the histrionics are loud, most men (some 76%), prefer to go to work and moan at their colleagues, rather than seek a cure at home.

A spokesman at the Engage Mutual Insurance company said:
“Men have had a bad press concerning their tendencies towards ‘man flu’, but our findings support the belief that men do moan more and are more likely to exaggerate their symptoms. They may have fewer bouts of genuine sickness a year, five compared to the seven suffered by women, but when ill, their attention seeking behaviour makes sure their partner knows about it.

“But even though men look for maximum sympathy, they tend to struggle on, being less likely to take time off work for an illness. Minor ailments aside, it is important for men to recognise and act on any genuine health concerns. Whether taking professional advice, or seeking suitable remedies and treatments to aid recovery, it is important to address any issues in order to maintain good levels of health.

“Women score higher than men on being prepared to dole out the sympathy for an attention seeking partner, regardless of whether they believe they are genuinely ill, or not. But when it comes to doing the little things that make a partner more comfortable when they are ill, men and women seem to be more evenly matched.”

So there you are then. It’s official, according to this mutual insurance company, men are the biggest moaners. And just wait until they get their new insurance premiums, then you’ll hear them really scream.

Guest Article by Neil Camp

Insurance giant Aviva has congratulated the financial advisors who have played a key part in ensuring families have at least some form of protection, by getting them to sign-up to the company’s free life cover for new parents initiative.

The Aviva free life cover was first launched in July 2009 and has since then provided over £50 million in free cover to new parents, some 30% of which have come via financial advisors.

Aviva explained the facts behind their free life cover, highlighting the fact that every year in the UK, 700,000 babies are born and some 36,000 people die leaving financial dependents. What’s more, of the UK’s five million families, 56% of them do not have adequate protection.

The Aviva free life cover scheme provides £10,000 free life cover per parent, per child, for a period of one year, from birth to first birthday.

Head of Protection at Aviva, Louise Colley, said of their free life cover: “It’s fantastic that 29% of registrations for our free cover came through Financial Advisers. We know that this is proving to be a real foot in the door for advisers, and recognise the importance of this as a conversation starter. All new parents want to know that their children will be provided for should the worst happen, and registering for a years’ worth of free cover with Aviva makes it really simple for them.

“We really want to encourage advisers to use this as an opportunity to stimulate the market to reduce the protection gap, even if this does not long term result in a sale for Aviva. We all recognise the huge scale of the protection gap and hope new parents cover provides advisers with a new reason to have the conversation about protection and be able to approach the delicate subject of supporting customer’s families should the worst happen.”

Guest Article by Neil Camp

A new study from Aviva Insurance has discovered that some 57% of general practitioner doctors are claiming that they have less time to see their patients than five years ago.

Worryingly, the Aviva Insurance study revealed that 50% of GPs said that this lack of time affected their ability to do their job and what’s worse, that 43% actually believed it affected their ability to diagnose.

Practising GP and chief medical officer at Aviva Insurance, Dr Hugh Laing, said:
“At Aviva we are committed to improving the health and wellbeing of our customers and we recognise the important role that GPs have in delivering this. To enable us to do this it is vital that we understand the concerns which affect both consumers and the healthcare industry in general.

“Our research shows that GPs are over stretched and this can affect the quality of support they are able to offer their patients. Web based technology has revolutionised the way we all work and fast access to high quality information can be an invaluable support for patients and professionals, but ultimately there is no substitute for a thorough assessment by a qualified GP, and from our research this is clearly not happening in many cases. As such we urge the new coalition Government to support and work with GPs to ensure delivery of the right care for patients.

“Aviva Insurance believes that people should have the peace of mind that they can talk to a GP for as long as they need at any time of the day or night.”

The Aviva Insurance study went into some detail regarding the time GPs spend with their patients, saying that most are likely to spend up to 20 minutes with each patient, whereas in reality, only ten minutes is possible. And the GPs’ patients seem to be agreeing, with another Aviva Insurance research report discovering that nearly 65% of people thought that NHS appointments were always rushed and that feeling is spreading to the doctor’s surgeries.

Another interesting fact that the Aviva Insurance study brought to the surface was the fact that of the doctors questioned, the vast majority (around 96%) use the internet on a daily basis when working and that online resources were a valuable diagnostic tool.
 
Lets hope that the Aviva Insurance report doesn’t reveal at a later date that internet usage is not about diagnosis, but checking that day’s horse racing form.

Guest Article by Neil Camp

The UK’s largest insurer, Aviva, announces that it has dramatically reduced the number of life insurance doctor report requests.

It figures that is has reduced the number of doctor reports needed to support life insurance applications by some 60%.

Life insurance doctor report requests are a major part of the application process and take-up a considerable amount of administrative time.

Indeed, Aviva see it as a win-win situation for everyone, with customers getting their cover arranged more quickly than before; with advisors spending a lot less time on behalf of their clients chasing paperwork and applications; and, requiring a lot less time by GPs on application queries.

Aviva call their initiative to reduce life insurance doctor report requests theImproving Customer Underwriting. Not as snappy a name as some, but it underlies the fact the Aviva have effectively transferred much of the responsibility of collating medical information by using nurses and customer underwriters.

Aviva admit that although life insurance doctor report requests are still vital to their application process, they will keep such requests to a minimum, as this remains the best way to offer their customers the most competitive terms in a very competitive industry.

“We constantly look for opportunities to lead and grow the market. One of the main delays experienced when setting up life insurance policies is gaining evidence from a customer’s doctor, which in a large number of cases doesn’t even change the underwriting decision.

“This can be slow, due to the level of other work GP’s have, and providing this information understandably can be less of a priority to a GP. We have taken the decision to lead the market whilst managing risk effectively. These changes show a new understanding of what is actually needed, developing our processes in the best interest advisers and our customers.”

The trend to lower the number of life insurance doctor report requests is likely to be repeated throughout much of the life insurance industry say some observers.

Guest Article by Neil Camp

London & County, who claim to be the UK’s leading no-fee mortgage broker, says that borrowers are paying too much for life insurance from their banks.

Indeed, they go on to say that there are some high-street banks in the UK who are charging double the amount for their life insurance than if they were organising it via an independent broker, or general insurance company.

And London & County, to prove their case that by paying too much for life insurance consumers are being not treated fairly, have released an example.

Take life insurance for a man, say aged 30, and covering a mortgage worth some £150,000. For that, HSBC would at the time of writing charge £17.05 a month. And RBS, again at the time of writing, would charge £15.95 a month.

Yet, for the same cover, Aviva would cost £8 a month at the of writing, and even better, Legal and General would put you back only £7.73 a month at the time of writing. And those differences translate into yearly savings of around £100, or over £2,500 if taken over the 25-year life of a mortgage.

Which seems to prove the case that people are paying too much for life insurance from their banks, and should shop around.

“Anyone who has bought life insurance from their bank should review whether it represents best value for money. The simplest way to see if they could save money is to use L&C’s hminute Life Insurance Check calculator This will show them quickly if their current premium can be beaten for equivalent cover. Anyone currently applying for a mortgage via their bank should get independent quotes for life insurance – the savings could be substantial.”

Incidentally, to help judge whether London & County are right in their view that people are paying too much for life insurance, they have won a number of awards, including:

• Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
• Best Technology Adviser – Money Marketing 2007
• Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
• Best National Broker – Mortgage Introducer 2005, 2006 and 2007
• Best Overall Broker – Mortgage Introducer 2005
• Overall broker of the year – Pink Home Loans, 2006 and 2007
• Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
• Business of the Year – The Bath Business Awards 2005
• Growth Strategy of the Year – National Business Awards (Wales and West) 2008
• Business Leader (Broker) – British Mortgage Awards – 2008
• Online Mortgage IFA of the Year – Financial Adviser – 2008

So, if you’re convinced that people are paying too much for life insurance, talk to London and County and others like them.

Guest Article by Neil Camp

Aviva UK Health, formerly the healthcare arm of Norwich Union before being re-branded in 2009 and one of the UK’s largest providers of private medical insurance, income protection, occupational health and group life products and services, has launched Speedy Diagnostics.

It’s a new low cost private health insurance policy which, claim Aviva UK Health, gives people prompt access to specialist consultations and diagnostic tests. The main benefits, say the insurance experts, is that there is no overall maximum benefit limit; it provides good access to specialist consultants; diagnostic tests such as CT and MRI scans, x-rays and ECGs are covered; and, also included are the relevant hospital costs usually associated with such diagnostic tests.

And that’s not all; Aviva’s new Speedy Diagnostics service provides people with 24 hour GP and stress counselling helplines, and a leisure and gym club membership discount of up to 40%.

Neal Archbold, head of propositions and market development at Aviva UK Health said:
“We’ve launched Speedy Diagnostics in direct response to customer feedback which showed that people wanted a low cost alternative to full private health insurance that complements NHS provision.

"Speedy Diagnostics does just that by helping to diagnose problems quickly and enabling customers to make informed decisions about next steps of treatment – whether it’s provided by the NHS or on a self-pay basis.

“In addition to this, we recognised that there is a gap in the market – particularly for younger and older customers who do not want, or may not be able to afford, a full health insurance policy, but still want peace of mind that if they do become unwell the problem can be diagnosed promptly. Speedy Diagnostics fills this gap. It also acts as a complement to other lower cost products such as Aviva’s My Health Cash Plan.”

There’s always a list of things not included of course and in this case, it’s worth having a quick look at the items not covered by the new Speedy Diagnostics service from Aviva.

First thing that’s not covered is the treatment itself, nor are the consultations and diagnostic tests after a specialist has made up his, or her mind, what’s wrong with you. Other items off the list are routine medical examinations and screening; any diagnostic tests that are ordered by a GP without referral to a specialist, tests that are designed to find the cause of infertility; and, sleep disorder tests.

So if you’re an infertile insomniac who visits the doctor a lot, this may not be a good policy for you.

Guest Article by Neil Camp