Litigation and claims frequency

• As society has become more litigious the frequency and size of claims has increased.

• Payments in excess of £1m are now common place and are set to rise further with personal injury claims increasing by approximately 18% per year.

• The many specialist claims management companies, which have sprung up to support the growth of "no win no fee" cases, have aided the rise in the number and size of claims.

Fraud costs escalating

• The annual cost of meeting claims presented by unscrupulous policyholders is now in excess of £1 billion. The cost of fraudulent claims now amounts to just over £17 for every member of the population. Fraud is growing to epidemic proportions in many areas of modern life, according to the Association of British Insurers and doubled between 2002 and 2004 and now runs at £3.5m every week and fraud continues to escalate on a dramatic scale fuelled by the present credit crisis. Fraud in the UK broke the £2bn barrier for the first time in 2009, with mortgage fraud accounting for 18% of all reported fraud, according to research from accountants and business advisers BDO.

Storms and floods

• During 2000 and continuing into 2001 we experienced some of the worst weather since records began. The devastation across large stretches of the UK resulted in huge costs to insurers.
• The Environment Agency predict an increase in weather related incidents with flooding becoming a normal seasonal hazard affecting millions of individuals and UK businesses.
• The reinsurance market (where insurance companies insure themselves) has reacted by increasing its prices dramatically. Properties in high-risk flood areas could see premium increases from 20-30% with some properties being refused cover altogether. Approximately 5.2 million properties are situated in high risk of flood areas.

Falling interest rates

• Both interest rates and inflation are at their lowest point for several decades.

• The result is a 10-year low on investment returns for insurers.

• Insurers can no longer rely on income generated from the markets to smooth poor underwriting results.

Employers' Liability losses

• The reserves insurers build up to pay future claims are being put under severe pressure by the emergence of claims relating to disease and old industrial processes.

• Reserves must be adequately funded now to ensure these potential future liabilities can be met.

Future hazards

Disputes on liability are likely to arise from a number of areas as yet unknown as well as some which are becoming more apparent now.

These include:

• Passive smoking

• Mobile telephone use

• Stress

• Carcinogens released by manufacturers

• Acoustic shock (affecting call centre staff)

• Computer use (RSI, back problems).

Economic cycle

• As economies move between growth and recession, there is a noticeable increase in particular types of claim.

• Arson, vandalism and theft all rise during periods of economic challenge.

Investment and savings new business fell by almost 60% over the last year as the economic situation worsened, according to the ABI. Prudent and dispirited savers now bear the brunt of Britain's Bungled Economy. With Deposit Interest Rates (now worthless) at their lowest level for decades are now hurting prudent and vulnerable savers such as pensioners and a call has been made to abolish payment of income tax on savings accounts for standard rate tax payers. It now costs savers to leave money on deposit: for example - a typical deposit investment of £10,000 attracting interest at 1% the account would be worth £10,100 after 12 months. £20 tax would be taken from this amount. Should inflation run at 3% the investment at the end of 12 months would be worth in real terms only £9777 resulting in a net loss of £222. Investment analysts tell us greedy banks are now cashing in on rock-bottom interest rates, fattening their profits by as much as £17.5 million a MONTH.

Cash in your deposit accounts - If you hold money on deposit and also have outstanding credit card balances then it is obvious to withdraw your deposit savings and pay-off outstanding credit card debt. For example should you hold £10,000 on deposit you will currently receive approximately £200 in annual interest, but if you also have a £10,000 credit card debt you will be paying approximately up to £3025 per annum in interest payments. It is therefore more than prudent to cash in your deposit accounts and pay-off all credit cards, store cards and overdrafts and remove those insidious credit card hooks that can cause so much financial harm.

..........The UK's Summer Flood Bill 2007 reached upward of £5,000,000,000.00 - Could we see a repeat this year? Insurers put on a brave face last year as they suffered huge financial underwriting losses. The main players in the domestic property insurance market are the banks and direct insurers. Could a flood repeat knock these property insurance underwriters from their golden perches? To find out about current Government flood warnings please click here

The Housing Act received Royal Assent in November 2004. It is estimated that 1.5 million house sales are transacted annually. The pack includes, Terms of Sale, Searches, Evidence of Title, Seller's property information form, Warranties and Guarantees, A report on the condition of the property (Home Condition Report), Planning consents and building control certificates. The cost of putting together a Home Information Pack is around £290. On the 16th June 2008 Sir Bryan Carsberg published his review into the housing market, calling for the abandonment of home information packs (HIPs) For the latest information please click here

Some banks are now awash with taxpayers' money and paying £billions to themselves in Bonus Payments but millions of borrowers are left floundering in a quagmire of high interest debt.

Credit card interest rates soar to excessive levels - Recent interest rate increases intensify UK credit card debt crisis. Credit card debt can cause great misery, anxiety and debt desperation. Late payment and other tariff charges coupled with high interest rates of up to 34.90% APR can mean extreme levels of prolonged anguish for many as family debt climbs ever higher and higher and coupled with an economy in recession the chances of reducing personal debt problems become harder and harder. The treadmill just notched up a gear and now runs at full speed with personal and business insolvencies running at unprecedented levels.

Avoid these hostile money grabbers. Leading merchants have recently published their latest tariff of charges and read as follows: up to £25 charge if you do not make a minimum payment by the payment date. £25 charge if your statement balance is over your credit limit. £25 charge if a Direct Debit or cheque is not paid when first presented. It is claimed that banks rake in £1.15billion a year from these punishing fees. Condemnation of these charges is expressed by the Treasury Select Committee and consumer groups. Consumers are being charged more than £300 million a year in unlawful penalties on credit cards, the competition watchdog said.

Most card companies will also charge a handling fee for cheque transactions of 3% of the amount of the cheque transaction. Minimum £2, maximum £75. Credit Card Merchants are now starting to turn the screws even tighter with minimum monthly repayments of £25 and increased service fees of 5% being imposed on credit card cheques. Consumers should be extra vigilant when writing these cheques, but better still, where possible, dump the debt, bin the cards, hang on to your cash and cut spending. Remember - 'A fool and his money are easily parted'

Beware the "Debt Dogs" - Vast numbers of British householders are shackled to debt who face financial destruction but should expect no mercy from the reviled debt bullies when defaulting on loan agreements. Treatment from broken and failed banks will be harsh and severe. Reducing debt balances should now be an urgent and a top priority.

With £billions of Tax Payers money being pumped into the banks the need for a Credit Card Debt Cancellation scheme is imperative. The Government should help people remove the shackles of debt. Britons are collectively paying £9 billion a year in interest on credit card debts they have accumulated, research has shown.

New reports have revealed that borrowing money from illegal loan sharks will load more than 100,000 families with a combined debt of £82 million to pay this year.

-----------------------------------------

Finance issues can be resolved through the Finance Ombudsman Services who are currently receiving very high volumes of complaints.

The following blog article was recently picked up on the Internet and reproduced verbatim

Square Mile Securities Limited has been declared ‘in default', leaving other adviser firms to stump up the cash to pay for compensation claims with one Verbatim Comment below:

"Yet again the regulator fails to regulate and consumer and advisers pay the cost. When is the media going to highlight what the FSA has cost this nation. I am sick and fed up of the media not attacking the FSA for its out right failing to achieve sod all in 20 years, accept put in to place a bonus scheme to reward the staff for achieving nothing. They have made a simple fix so complex they themselves can no longer understand it, whilst they empire build to provide jobs for the boys. Why don't they take this out of the £33m bonus they intend to pay themselves?" Martin Evans Cert, IFA, PRISM Independent Financial Advisers"

Perhaps this IFA's comments are justified as the Financial Services Industry lost 1,000 firms and 5,600 Appointed Representatives in just the last year alone with expectations of a significant reduction in the number of firms and advisers in the future. Industry talk suggests that 30% or even 50% of IFAs exiting the industry post 2012. Some estimates even suggest a job destruction of as many as 10,000 advisers who are likely to leave financial services between now and the end of 2012 through the overburden of excessive regulation.

In a bold statement the Conservatives have said they would scrap the FSA and put the Bank of England back in charge of regulating financial institutions. The Liberal Democrats have also outlined their strategy with regard to future regulation.