There will be few people under the age of 50 who remember the iconic actress Jean Alexander, who played Hilda Ogden in Coronation Street for many years. Alongside her henpecked screen husband Stan, played by Bernard Youens, they were a staple of my family’s TV viewing. The Ogden’s represented the downtrodden struggles of a life close to poverty but never close enough, a life with a theme of bad luck and frosty relationships. I am reminded of this for reasons probably only I can understand today as the new Odgen discount rate came into place, and specifically a very touching scene when Hilda insisted that that day the Ogden’s were being “snooty” and uttered one of her most famous lines having kissed her husband Stan on a prize winning weekend away.
” What’s that lipstick taste of …. Woman Stanley Woman! “
It would be fair to say that the Association of British Insurers (ABI) are also feeling rather “snooty” for different reasons and there is no sign of being on kissing terms with the Government – whatever the lipstick ! It is reported that ABI Director General Huw Evans is considering legal action against the Government decision. Whether this actually occurs is uncertain but the very mention of this shows the depth of contempt for the decision.
Read our earlier piece about why the Ogden rate is so important
It’s reporting season and commercial insurance buyers should start to take note of the smoke signals coming from insurers and the likely impact on risk appetite and pricing. Generally, premiums are rising as insurers seek to maintain and/or control underwriting profitability – Combined Operating Ratios (COR). Not to be taken too literally as balance of lines of business impacts hugely but there is a sense of rising pricing concerns. Good news for the Government and Insurance Premium Tax. Bad news for purchasers of insurance and affordability of risk transfer.
ERS – Highlighted a £3.1 million profit in the first half of 2019 with rising customer premiums to £182m from same period last year of £167m. Buyers note that its combined operating ratio (COR) has deteriorated from 96.6% to 102.8%. It said a reflection of the personal injury discount rate adjustment to -0.25%.
LV – a personal lines insurer declaring a 55% surge in operating profit of £35m. It said that it would have been £48m had it not been for the £13 million impact of Ogden.
RSA – stated that it would be reviewing its London commercial business after already withdrawing from some areas already. RSA’s group combined ratio meanwhile improved slightly to 94.3% from 94.7%, the company would take a hit of £14 million to £15 million for the recent change in the Ogden rate
Allianz – commercial lines underwriting profit slipped in the first half. Its UK combined operating ratio was 96.2% in commercial for the first half of 2019, compared to 94.3% for the same period last year. Premiums rose 12.7% over 2018 from £589m to £664.1m.
Will there be a kiss and make up? I doubt it ..”Ta- ra chuck” for now….
Anthony Jones UK Ltd