In what century did Vince Cable acquire his I-Spy primer to the financial world? The idea that the shareholders make a positive influence in the banking institutions remunerations is laughably naive. Pension or Investment Funds, Insurance Companies and Banks themselves hold the greatest majority of shares in the Gilt-Edge companies quoted on the StockMarket. They have no interest or commitment to the companies they hold shares in other than the immediate shortterm one. Will their investment make them more money than any other option? They do not have any long term concerns as to the growth and sustainable development of the companies invested in. Worse, they work in an incestuous world where their key figures are on the executive board of the major companies invested in. Nominate me and I will nominate you in turn. The scratch my back and I will scratch yours rule being first and number one rule of their closed club. So these investment institutions, the overwhelming majority shareholders, are going to police the remuneration packages of the Banks? Only to the extent of seeing who got paid what then making sure they got more when their own pay rise comes round.
Which is not to say the small individual investors cannot make an impression, as they did just few months back. Collectively they registered a minority protest vote at the remuneration packages proposed. The institutions block votes had the overwhelming majority. The 'small' investors protest vote was duly noted, their obvious concerns would be given consideration, but at the say time, it was pointed the Board was not bound by it in anyway. They had their comfortable, legal, majority.
The old model of the shareholders with an interest in and a financial commitment to the long term success of a company, collectively voting for a long, stable and secure future has gone. The investment institutions have sidelined them and institutions goals are way off the health of the company invested in. We need to tinker with the share-holding model. Only individual shareholders to be allowed to vote for remunerations, reserves, dividends and appointments to the Boards. Any shareholder with shares in excess of x,000's being required to prove that they are an individual and their address is not shared with any other share holder. That way the incestuous insider nominations will be broken together with the leap-frogging of ever higher salary deals. We might just get back to investing in companies for their survival and long term success.
Showing posts with label insurance. Show all posts
Showing posts with label insurance. Show all posts
Monday, 2 July 2012
Friday, 5 March 2010
Insurance Scam
For any one type of risk, over a timescale the number of events and the costs to settle are averaged out and for a given pool of contributors the premium necessary to make a profit and pay out on the claims that will arise are calculated. Some years will be good with few and small claims and some years will be bad with many or very expensive claims. Just like roulette, over a period of time the banker, or in this case insurance companies, will always win because that is how the figures are stacked up. Fine.
Not content to make the just profit they anticipated increasingly nowadays the insurance companies are now arranging to cream off more than just a fair share of profits. If you tilt the average occurrence of events in your favour, by for example excluding know frequent or costly occurring events, cracking or water ingress in a property, young drivers or cancer, they win hands down. Just like stacking good cards into a hand, they can even further improve their profits by playing hardball with the small print, "fully reveal whatever reasonably might influence decision to insure", "only securely locked and alarmed premises or cars are insured against a break-in", "providing you have never ever discussed with your Doctor any health issue are you insured for a health problem". Even worse still, having put every word and clause firmly into their favour now, if you have to claim, your renewal premium will go through the roof, forget about protected no-claims discounts, in todays world they have become meaningless.
Is it so unreasonable that when an insured person experiences something extra-ordinary they should be able to claim in a supportive, not openly hostile and adversarial climate, for a speedy settlement, of, no more than what the words offered to do at the time the insurance taken out? Surely that is why they took out insurance, paid insurance premiums, all for the peace of mind that they are covered incase of the dreadful unexpected event actually occurring, even if, horrors of horrors, the event was triggered by an act human error. We do after all, all make mistakes from time to time and look to insurance to protect us from our own culpalbilty.
Now we know there are people who set out to abuse and claim for far more than their entitlement and make it their life's work to create and extort extravagant insurance claims. There are no doubt solicitors out there that will aide and abet them in their extortion. I fancy the insurance companies have the nonce and legal clout to see off multiple claims from self-evidently fraudsters but why should the ordinary man in the street be made to suffer and endure the harsh treatment metered out to cheats as if they too were a cheat.
It has reached such a pass where, if you have the misfortune to experience a claim event, your claim will be refuted, or even worse your insurance will be retrospectively invalidated, by hindsight manipulative interpretation of words, hiding behind a host of concepts such as "prior knowledge", "exclusions", "failure to follow notification procedures", "lack of corroborative evidence" or "failure to maintain or implement security".
A compassionate, supportive and a fair appraisal, all gone. Instead narrow and mean minded wriggles to find only the get out words and not that sympathetic look at the whole holistic picture. So instead we have total absence of certainty and full doubt whether the cover anticipated actually exists and will replace the loss. Why indeed pay the premiums, why take out insurance if, when it is needed, it fails to deliver the glowing all-embracing rosy promises of the insurance offer. Better off putting the premium money in a sinking fund and hoping your averages wont turn up for a few years, scarcely worse than taking out an insurance that, odds on, isn't going to pay out in anycase.
Not content to make the just profit they anticipated increasingly nowadays the insurance companies are now arranging to cream off more than just a fair share of profits. If you tilt the average occurrence of events in your favour, by for example excluding know frequent or costly occurring events, cracking or water ingress in a property, young drivers or cancer, they win hands down. Just like stacking good cards into a hand, they can even further improve their profits by playing hardball with the small print, "fully reveal whatever reasonably might influence decision to insure", "only securely locked and alarmed premises or cars are insured against a break-in", "providing you have never ever discussed with your Doctor any health issue are you insured for a health problem". Even worse still, having put every word and clause firmly into their favour now, if you have to claim, your renewal premium will go through the roof, forget about protected no-claims discounts, in todays world they have become meaningless.
Is it so unreasonable that when an insured person experiences something extra-ordinary they should be able to claim in a supportive, not openly hostile and adversarial climate, for a speedy settlement, of, no more than what the words offered to do at the time the insurance taken out? Surely that is why they took out insurance, paid insurance premiums, all for the peace of mind that they are covered incase of the dreadful unexpected event actually occurring, even if, horrors of horrors, the event was triggered by an act human error. We do after all, all make mistakes from time to time and look to insurance to protect us from our own culpalbilty.
Now we know there are people who set out to abuse and claim for far more than their entitlement and make it their life's work to create and extort extravagant insurance claims. There are no doubt solicitors out there that will aide and abet them in their extortion. I fancy the insurance companies have the nonce and legal clout to see off multiple claims from self-evidently fraudsters but why should the ordinary man in the street be made to suffer and endure the harsh treatment metered out to cheats as if they too were a cheat.
It has reached such a pass where, if you have the misfortune to experience a claim event, your claim will be refuted, or even worse your insurance will be retrospectively invalidated, by hindsight manipulative interpretation of words, hiding behind a host of concepts such as "prior knowledge", "exclusions", "failure to follow notification procedures", "lack of corroborative evidence" or "failure to maintain or implement security".
A compassionate, supportive and a fair appraisal, all gone. Instead narrow and mean minded wriggles to find only the get out words and not that sympathetic look at the whole holistic picture. So instead we have total absence of certainty and full doubt whether the cover anticipated actually exists and will replace the loss. Why indeed pay the premiums, why take out insurance if, when it is needed, it fails to deliver the glowing all-embracing rosy promises of the insurance offer. Better off putting the premium money in a sinking fund and hoping your averages wont turn up for a few years, scarcely worse than taking out an insurance that, odds on, isn't going to pay out in anycase.
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