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Strong Brands the Likely Winners of UK Insurance Pricing Review

Strong Brands the Likely Winners of UK Insurance Pricing Review

UK personal lines insurers will need to adjust their pricing models in response to the Financial Conduct Authority’s proposed remedies surrounding the pricing of policies for renewing customers, according to a new AM Best commentary.

The Best’s Commentary, “Strong Brands the Likely Winners of UK Insurance Pricing Review,” states that as insurers will need to increase the prices applied to new business to offset the impact of lower renewal premium on earnings, other aspects of their business profile will likely play an increasing role in the decision-making process of potential and established customers.

This suggests that brands currently enjoying high levels of recognition and customer satisfaction will be best positioned to take advantage as policyholders begin to take more notice of a company’s customer service levels, the experiences of other policyholders (expressed via online channels), and metrics such as claims approval ratios.

To access a complimentary copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=302026.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201014005665/en/

Contacts

William Keen-Tomlinson
Senior Financial Analyst
+44 20 7397 4395
[email protected]

Catherine Thomas
Senior Director, Analytics
+44 20 7397 0281
[email protected]

Richard Banks
Director, Industry Research – EMEA
+44 20 7397 0322
[email protected]

Edem Kuenyehia
Director, Market Development & Communications
+44 20 7397 0280
[email protected]

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A Significant Majority Of Democrats And Republicans Support Strong Consumer Protection Regulations And Tougher Rules For Wall Street

A Significant Majority Of Democrats And Republicans Support Strong Consumer Protection Regulations And Tougher Rules For Wall Street

It has been ten years since the Wall Street Reform and Consumer Protection Act (Dodd-Frank) was signed. Given the complex nature of rule writing and the fact that fifteen regulators were involved, not all rules were finalized or implemented. Since Trump came into power, many of the rules that were finalized have been tailored and watered down. Yet, in the vast majority of both Democratic and Republican voters want strong consumer financial protections and tough regulation of the financial services industry.

Yesterday, in an Americans for Financial Reform and  Center for Responsible Lending sponsored-event, Lake Research Partners presented polling data, which shows that when in comes to a desire for tougher regulations for Wall Street, the word bipartisanship still exists.

Lake Research Partners’ key findings were:

·      Over nine in ten voters (91%) say it is important to regulate financial services and products to ensure they are fair to consumers, including 68% who say it is very important.

·      Nearly three-quarters of voters (74%) believe that Wall Street financial companies should be held accountable with tougher rules and enforcement, while only one in ten (10%) believe that their practices have changed enough that they don’t need further regulation.

·      More than half of voters feel that Wall Street and big corporations have gotten too much help from the government in response to the COVID-19 crisis (56%), while less than one in ten (8%) believe that they did not get enough help. Less than a quarter (23%) of voters feel that Wall Street received about the right about of aid.

·      Three-quarters (75%) of voters also believe there should be more government regulation of financial companies, such as Wall Street banks, mortgage lenders, payday lenders, debt collectors,

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Australian banks strong enough to withstand economic shock, support recovery – RBA

Australian banks strong enough to withstand economic shock, support recovery – RBA

By Swati Pandey

SYDNEY, Oct 9 (Reuters)Australia’s financial system has the strength to withstand the nation’s large economic contraction and support the recovery even though risks are “elevated”, the country’s central bank said on Friday.

Risks to the financial system would be exacerbated by a weaker-than-expected economic recovery, stemming from further setbacks on the coronavirus-related health front or international political tensions, the Reserve Bank of Australia (RBA) said in its biannual Financial Stability Review.

Low levels of interest rates, loan repayment deferrals and a massive government stimulus have so far supported the economy, helping avoid defaults and business failures.

The RBA is widely expected to further lower its cash rate to 0.1% from a record low 0.25% at its November policy meeting. AU/INT

Earlier this week, Australia’s conservative government announced a larger-than-expected fiscal stimulus, including a new wage subsidy scheme, to support the country’s virus-ravaged economy.

Even so, the RBA expects business failures to rise and loan impairments to increase going forward.

“With unemployment having increased and many employees working reduced hours, the number of households experiencing financial stress has increased and will increase further,” the report said.

The potential for mortgage losses for lenders is also higher if distressed home sales increase.

“While credit is available at very low interest rates, reduced housing demand from very low immigration and the rise in unemployment contribute to the risk of further falls in housing prices,” the RBA added.

Over the first six months of 2020, the Australian economy contracted by over 7% under the weight of strict mobility restrictions to suppress COVID-19.

The unemployment rate has since risen from around 5% pre-COVID to near 7% with economists predicting it would jump to 10% in coming months.

The RBA was still confident the country’s banks could weather the storm.

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Why Is The Market So Strong And Economy So Weak?

Why Is The Market So Strong And Economy So Weak?

The continuing strength of the stock market, even as the coronavirus pandemic batters the U.S. economy, has baffled many investors. The Dow Jones Industrial Index fell some 35% in 20 trading days the first three weeks of March as COVID-19 began spreading rapidly globally, but it has since gained nearly 60% to levels above 28,650. At the same time, the Commerce Department reported the U.S. economy shrank 31.7% in the April-June quarter. Part of our job at Equitas is to research many areas of the market and the economy, analyze the current environment, and to search for the investment opportunities. While there are numerous views and theories, in this KnowRisk Report we explore and expand on why the stock market is so strong, while the economy is so weak. We start with Wharton finance professor Itay Goldstein who has boiled it down into two reasons: the long-term prospective of the stock market, and the unprecedented cash infusion of the Federal Reserve. 

The First Reason

Goldstein says at all points in time “the stock market is meant to be forward-looking,” Indeed stocks have risen during seven of the past 12 recessions going back to World War II. “In general, the stock market is a bit different from the economy, in the sense that what you see right now in the economy is what is going on right now” such as production, employment and so forth, he noted. Even in “normal times,” stock prices and economic output would not move in tandem, according to Goldstein. In fact, we may have situations “where the stock prices may predict something that is going to be different from what we see right now.” The S&P 500, for instance, is driven more by manufacturing, while U.S. gross domestic product, the broadest measure of goods and services

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U.S. Consumer Sentiment Strong Despite Drop in Financial Comfort

U.S. Consumer Sentiment Strong Despite Drop in Financial Comfort

(Bloomberg) — A weekly measure of U.S. consumer confidence remained close to the highest level since early April despite a retreat in sentiment about personal finances.



a person walking a dog on a leash in front of a store: A customer waits to enter The RealReal Inc. store on Madison Avenue in New York, U.S., on Saturday, Sept. 26, 2020. The pandemic has battered New York City businesses, with almost 6,000 closures, a jump of about 40% in bankruptcy filings across the region and shuttered storefronts in the business districts of all five boroughs.


© Bloomberg
A customer waits to enter The RealReal Inc. store on Madison Avenue in New York, U.S., on Saturday, Sept. 26, 2020. The pandemic has battered New York City businesses, with almost 6,000 closures, a jump of about 40% in bankruptcy filings across the region and shuttered storefronts in the business districts of all five boroughs.

The Bloomberg Consumer Comfort Index declined 0.5 point to 49.3 in the week ended Sept. 27, data released Thursday showed, the first decrease since mid-August. The measure remains well below the pre-pandemic level.

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A gauge of comfort in personal finances decreased 2.1 points, the largest decline since early May, as the stock-market selloff drove the S&P 500 to close lower for the fourth consecutive week. The subindex of the economy rose slightly to a fresh five-month high, while a measure of the buying climate was little changed.

The sentiment gap between the low- and high-income workers narrowed as the comfort among Americans with annual household incomes more than $100,000 dropped 2.8 points to 63.3. The partisan divide widened to a two-year high as sentiment among Republicans rose, while falling for Democrats.

The data echoed the Conference Board’s monthly confidence measure published Tuesday, which soared to a six-month high in September despite a reduction in unemployment benefits and worries about an increase in Covid-19 cases this fall.

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

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