Tag Archives: Insurance

Points of View: Insurance

This week I have been looking at the unfolding 2017 hurricane season and the effects that Harvey, Irma and Maria could have on the US economy and the broader insurance sector.  These events have caused devastation across the Caribbean, Texas and Florida.  The financial impact that they will have is difficult to judge this early on.  However, total losses are expected to be between $80 and $125 billion.  Over the short term there will be a negative impact to the US economy. US jobs data has already shown that the number of jobs created by the economy has contracted for the first time since 2010 and the hurricanes have been seen as a large contributor. However, economic activity is expected to return as insurance policies pay out, property is rebuilt and damaged items such as cars are replaced.

Closer to home the impact will be felt by Lloyd’s Insurers, the London based, global insurance market. They have estimated that Harvey and Irma will cause around $4.5bn in losses to their members.  This is expected to lead to an underwriting loss for the year but CEO, Inga Beale, has stated that this is to be expected in such events and that “this is what we are here for”.

Natural disasters are both good and bad for those insurers covering this market. On one hand, they will suffer some large capital pay-outs in the short term. On the other hand, such events inevitably help push future premiums up. This is especially relevant at the moment given that the lack of disasters in recent years has driven premiums down to a level that has caused problems in the market.




Stocks in Focus: Temple Bar

This week I am looking at investment trusts, which are listed companies enabling investors to gain exposure to a wide range of financial assets within a single investment.  More specifically, I am looking at how their ability to “gear up” can impact investors’ returns.

Usually expressed as a percentage, an investment trust’s gearing measures its debt in proportion to its equity capital. There are two main types of debt: bank borrowings and debentures (i.e. long-term fixed rate agreements, secured against the company’s assets). The reason that investment trust managers use gearing is to enhance investment returns from their portfolio during periods when they are confident returns will exceed the cost of borrowing. For instance, gearing may finance acquisitions without the manager having to sell existing investments (potentially at unattractive prices) in order to raise the required funds. However, companies with excessive gearing are more vulnerable to economic shocks as they still have to service their debts from potentially lower cash flows in downturns.

One example of how high borrowing costs can impact returns is Temple Bar, a £700m investment trust that has underperformed in the short term versus its peers. Gearing of 16% is via two relatively expensive debentures issued in the 1990s, before contrarian investor Alastair Mundy took the reins in 2000. Having retained high levels of cash largely to neutralise the increased market exposure that gearing can imply, it is interesting to note that Temple Bar’s first and most expensive debenture matures in 2017, allowing the opportunity to pay it off or refinance at cheaper rates. In the meantime Mr Mundy has taken advantage of the recent market weakness to add to investments selectively and thus reduce cash levels across several of his funds.


NW Brown announces appointment of a new Deputy Chairman

The Board today appointed Mark Jeffries as Deputy Chairman of the NW Brown Group from 1st July 2015.

Mark said of his appointment:  “The NW Brown Group has always impressed me hugely. Its people are highly professional and the loyalty of its clients speaks volumes for the quality of their advice. I am really looking forward to applying my experience to help the board take the Group to the next stages in its development by building on such strong foundations”.

Editor’s note

NW Brown is the largest independent East Anglia-based financial services house. It operates in all areas of financial planning from retirement and inheritance tax planning for individuals through to advice on pensions and staff incentive and share schemes for employers. It is probably best known for its bespoke investment management service for private individuals, trusts and charities, which currently manages over £700m of client assets.

Mark Jeffries recently stepped down from his position as the National Senior Partner and Chairman of the Board of Mills and Reeve. He is now a consultant with the firm. He has spent over 30 years as a partner of that firm in different positions and locations. He was an elected member of the CBI East of England Regional Council, and is currently an External Adviser to the Department of Education on Free School applications and a director of the Norfolk and Norwich University Hospitals NHS Foundation Trust.


Financial Companies Join Forces to Improve Service

NW Brown Group has announced an investment in NW Brown Insurance Brokers by One Broker Ltd, owner of Norwich based Knowlden Titlow Insurance Brokers (KTIB). Details of the amounts and financing have not been disclosed but it is understood that the total investment over the next few years will exceed £3 million.

NW Brown Insurance Brokers will continue to operate from its Head Office premises in Regent Street, Cambridge, under the same name, as well as maintain its presence in Norwich.

Commenting on the agreement Alan Kefford, Chairman of NW Brown Group said “This final step is the logical culmination of a long process of co-operation. We bought the KTIB Financial Services operation three years ago and we have co-operated for years in a joint operation called the Eastern Alliance and in other ways, including systems development.  Whilst our position in East Anglia as a top quality Financial Services operation is strong I am delighted that we will now have access to better specialist services for our clients via KTIB. We are always seeking ways of improving service for existing clients and of introducing new clients for whom we can provide that high level of service and this closer partnership gives the prospect of doing both for not only the Insurance Broking but also the Investment business.

NW Brown Group chief executive Marcus Johnson explained that modern-day insurance broking consists of highly specialist and niche businesses. KTIB’s expertise includes its widely acclaimed Synergy facility for small business insurance solutions whilst fleet owners and motor cyclists will also find specialist schemes which cater exclusively for them. These will lead growth in the Cambridge office. NW Brown Insurance Brokers’ experience in landlord and tenant insurance from the Cambridge market has been transferred to Norfolk, where an increasing market share is being built on work of recent years in developing economic and innovative solutions for property owners.

Robin Plaster, the new Managing Director of NW Brown Insurance Brokers and owner of One Broker Ltd said “We have both built our firms on high quality advice and efficient execution. I look forward to working with our new colleagues to grow our business in what is perhaps the most exciting area of the Country intellectually, technologically and financially. Our insurance solutions have applications in all areas and I look forward to working with Phil and his team to develop our strong presence in East Anglia. We are confident that the combined skill set of the two firms will make us a recognised leader in our chosen fields. ”

Robin Plaster has become Managing Director of NW Brown Insurance Brokers Limited and Phil Thorpe will join the Board of KTIB. Phil will continue to have responsibility for running the operation on a day to day basis, along with fellow Directors Shaun Lenton and Richard Rampley. In addition John Knowlden will join the board of NW Brown Insurance Brokers.

NW Brown Insurance Brokers is best known for its expertise in the specialist sectors of Education, where clients include colleges and schools, Technology where many Cambridge companies use their help, Financial Liabilities, protecting many local professionals, and Landlord and Tenants (including Listed Buildings) where most larger local property managers take advantage of their schemes.

Marcus Johnson, right, Chief Executive of  NW Brown Group with Robin Plaster, managing director of Knowlden Titlow Insurance Brokers outside Pembroke House, NW Brown’s Norwich office.

Marcus Johnson, right, Chief Executive of NW Brown Group with Robin Plaster, managing director of Knowlden Titlow Insurance Brokers outside Pembroke House, NW Brown’s Norwich office.

Getting Your Facts Right

NW Brown attends exhibitions and puts on property events at our offices in Cambridge and Norwich.  We speak to many landlords who have queries relating to insurance. We have been shocked to find that many ‘accidental landlords’ have moved out of the home they previously lived in and not told their home insurer about the change in their circumstances.

Home insurance policies are rated on various factors including the individuals living in the home. For example, a home owner living at the premises has a greater level of control over the property compared to the same property with tenants living there. It is also important to remember that cover provided under a Home insurance policy and a Property Owners policy meet different needs.

Millions of policies are issued every year, and it is impossible for insurers to check the details of every policy to ensure the correct information has been provided to rate a risk on. It would be very expensive to do so. You can imagine the effect this would have on premiums. Policies are therefore issued as contracts based on trust (utmost good faith) between the policyholder, the insurer, and where one is involved, an insurance broker or agent.

Whilst you may not think that a minor detail will make any difference in how the insurer views the risk, it may do and in the event of a claim it may cause you considerable financial hardship. If you are not sure if something should be disclosed, you should tell your broker or insurer. 

The law relating to duties of the insured changed in January 2013, under the Consumer Insurance (Disclosure and Representations) Act 2012 relating to consumers buying insurance for personal and private use. The new Act puts a duty on the private individual to take reasonable care to be truthful in response to questions asked by the insurer, and not misrepresent the facts relating to the risk before the policy begins. Insurers can avoid paying for claims where the policyholder has not been truthful.

Letting property is a business. This means that as a landlord owning one or multiple properties, the new Act does not apply. As a commercial policyholder you have a duty to provide any information that would influence an underwriter, to be open and honest, and provide all the necessary information relating to the risk, even if the information has not been asked for.

For example, the construction of a let property is important relating to the risk of fire and water damage. A flat roof for example, is more prone to water leaks compared to a pitched roof, and more likely if it is near the end of its life. The premium will reflect the increased risk, and the insurer may also apply additional requirements such as regular inspections, and maintenance. The cost of insurance may be more, but it will be significantly less than that of meeting the cost of damage when an insurer refuses to pay due to ‘misrepresentation’. 

If you think you need to tell your insurer about a change, pick up the phone now to ensure your insurance will protect you in the event of a claim. NW Brown provides quotations for landlords, tenants and home owners. Please call our team on 01223 720350 for a quote. 


Who is responsible?

Is it fair for a landlord to be held responsible for something their tenant has done?

In 2008, a contractor visited a rented property to carry out emergency work on a boiler. He made his way upstairs to work, but on hearing a loud noise he quickly made his way downstairs, but unfortunately he fell and hurt his ankle.

The tenant had removed the stair banister in 1991. There had been several visits by contractors to the home to carry our maintenance without any incidents. No reports were made to the landlord regarding the hazard and no action was taken to replace it.

This was the case known as Hannon v Hillingdon Homes Ltd 2012. Hillingdon defended the action taken against them under the Defective Premises Act regarding Mr Hannon’s injuries. They claimed that the Act did not apply to them because:

  • The banister and handrail were not part of the building structure 
  • They were under no duty to replace 
  • The tenant removed the handrail and banister *they were not notified of the defect

The ruling went against Hillingdon because the court decided that the staircase and banister form part of the building structure. It was consider that the landlord should have been aware of the fault due to the number of visits over the years, and they should have arranged its repair.

How can insurance help?

Insurance can help protect a landlord in the event of an incident that could lead to a third party taking action against them. In some cases, agencies can also take legal action, such as environmental health.

A landlord is expected to protect tenants and the public against injury or damage to their property, by maintaining their premises. A property owner is expected to manage the risk of accidents in order to prevent them. Once notified of a defect, the landlord is expected to make arrangements for the repairs to be carried out by a competent person. If the tenant is aware of the defect but does not report it, courts have reduced claims made due to the contribution of negligence on the tenant. 

Property Owners Insurance will generally provide protection in respect of the landlord’s legal liability for accidental injury to tenants and other individuals and accidental damage to property belonging to third parties. If the landlord is employing anyone, Employers Liability insurance will be required. Property Owners Liability will not provide cover for employees when carrying out their duties as an employee. 

The landlord needs to ensure the limit of cover selected is adequate for any claims that may be brought against them.

It is important to select the correct level of cover. A Property Owner’s Liability policy would pay claims up to the limit of indemnity selected per event. Due to the potential cost of awards for personal injury rising, it is usual to select a £5M limit. If an incident happened and the claim went beyond the limit of cover selected, the owner of the property would be liable to pay the excess.

Things to consider in selecting the limit would include the type of tenant occupying the property and the number of people who may be affected by a single incident. 

If the property attracted high profile tenants such as professional footballers or other high earning individuals, the cost of loss of earnings and other damages that could be claimed from injury would potentially mean a claim on excess of £5M. 

An incident that involved many individuals at the same time would also mean a larger claim that would exceed lower limits such as £1M and £2M limits. 


It is also important that you ensure contractors working on your property are adequately insured. A faulty boiler could cause an explosion that potentially could be catastrophic in terms of damages. Any claim brought against you for injury in an incident like this, would result in your insurer claiming from the contractor’s insurer. This is known as ‘subrogation’ in insurance terms. 

We always advise using a broker to help you choose the right level of cover. If you consider after reading this article you wish to increase your limit of indemnity mid-term it can be organised easily and is often much lower in cost than you may think. 

For more information on our insurance services please contact Debbie McIntyre on 01223 720214 or email debbie.mcintyre@nwbrown.co.uk or visit http://www.nwbrown.co.uk/private-client-insurance/

Tenant’s Insurance – who benefits?

Your tenant has saved the deposit, signed the tenancy agreement, and they are ready to move in. The deposit remains their money and is protected by one of the Government’s approved schemes.

Accidents happen; they can usually be avoided but it only takes a second to knock a bottle of red wine over onto a cream carpet. Sometimes cleaning can work, but often the carpet needs replacing. The tenant is responsible for any damage they cause during the tenancy and the first solution can be to withhold some or all of the deposit. Landlords may wish to claim on their own insurance, however that could affect the renewal premium and there is normally an excess to pay.

There is another solution that can protect all parties – tenant insurance. Our policy covers tenants for accidental damage they cause to their landlord’s contents, fixtures and fittings of up to £3,000.*  We also include personal liability of £2,000,00 that has proved invaluable to many of our policyholders. Tenants have used this policy to cover their liability when damaging cars whilst cycling.

This policy will help protect the tenant’s deposit in the event of accidental damage they cause (over and above the excess of £100 for each claim). Landlords are also protected. The limit of cover* is usually more than the deposit paid, so if the damage is higher this helps remove issues of recovering compensation for damage. We also provide cover on a new for old basis, which means no deductions are made for wear and tear, which in the eyes of the dispute service would be betterment. This helps eliminate many disputes, and speed up the process to get everyone back to normal.  

We have a dedicated in-house claims team who are there to help the tenant through the claims process and work with their managing agent or landlord where necessary, who usually use local trusted contractors who will get the property back to normal, keeping everyone happy.

The tenant, if moving on, will receive their deposit back. The policy excess may be deducted, but that still leaves the tenant in a much better position than losing the entire cost of the claim. This also helps to avoid the need to go to the dispute service should there be disagreement. The DPS reported last year that since deposit protection had become law, disputes over damage and decoration had risen by ten percent.

Cover starts from £66 or a year with an option to increase the cover to include the tenants own belongings including furniture, laptops, and mobile phones.

It is always best to avoid claims, and to help you we post tips on Twitter every week, such as prevent burns to carpets – always use an ironing board.  

For more information or to get a quote, please go to insurance.nwbrown.co.uk/tenant-insurance/selecting your letting agent from the list.