RBS Sells Off Direct Line Insurance Cheaply with Plumbers Insurance
October 12, 2012 Insurance Blogger Banks, car insurance, Insurance Companies, Insurance Mergers and Acquisitions Comments Off
City Analysts are stating that the flotation of government owned Direct Line is priced well, as the share price is up 7% today on the grey markets from the initial offering of £175 per share. The official floatation is not until the 16th of October.
However this begs the question that the company is being sold cheap and the taxpayer losing again.
The UK government has pumped more than 21 billion pounds into RBS, and the insurance side is one of the most profitable areas.
The Stock market listing of the company, which also owns the Churchill and Green Flag brands, is the largest in London this year.
Private investors have been less sceptical about the float than other institutions.
At 175p a share, Direct Line would have had a market value of £2.63bn, which is much is lower than a £2.8bn-£3.5bn value placed on the insurer by the IPO advisor. Clearly the private investors see a quick profit to be made.
The future of the Croydon based company, which invented call centres, might appear rosy to those looking to make a quick buck, however the UK car insurance market is already saturated and the competition enquiry into car insurance might crimp future profits, however the brand under new management has been seen to perform well over the last two years. More about Plumbers Insurance
Does your BMW Car Insurance actually cover you for theft?
If you own a recent BMW car you may be surpised to find that it’s not actually covered should you fall victim to theft and try to make a claim.
The problem stems from the on-board computer and the associated key-fob technology which allows car thieves easy access to your vehicle.
Technology has been widely available and can be obtained on the Internet, that allows would be thieves to tap into diagnostic system of the on-board computer and clone the key technology, allowing easy access to the car.
The problem has been exacerbated by recent EU competition directives that allow non BMW garages the ability to access diagnostic systems.
West Midlands police have reported 154 thefts of BMWs with this technology in the last three months.
The Government sponsored company responsible for setting the insurance security rates Thatcham Research thatcham.org for members of the ABI reported the problem to insurance companies over nine months ago. They have refused to downgrade the 5 star security rating of the affected models as they state this would be unfair to the manufacturer.
The BBC has been leading an awareness campaign for owners of these BMWs with its consumer affairs program Watchdog and Radio 4.
Speaking on Radio 4 a Mr Gordon who is a director of Southampton Football Club said he was treated like a criminal by his car insurance company LV after he made a claim for theft. Despite having both keys in his possession and a CCTV tape he managed to secure from close by to where the car was stolen from he claimed that LV inferred that he was party to the theft. They sent out a private investigator to interview him and treated him as a suspect. It took them 9 months to finally settle claim, only paid out the minimum amount which was a lot less than the cars value and he lost his no claims discount.
When contacted BMW suggested that any concerned owner should contact their dealership and fit secondary security devices such as steering wheel crook locks.
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