You may find yourself falling behind with bills and mortgage or rent payments, you might be struggling to deal with household repairs or cover travel costs, and you might be having problems with a range of other essential payments.

If you are struggling financially, there are steps that you can take in order to ease the financial strain and cut back your outgoings. Sometimes, you can make a big difference to your situation simply by tightening your belt, as many of us spend far more money than we realise on things that we do not need. We also often spend far more than we need to on bills and other outgoings. In this article, we will look at some of the ways you can tighten your belt and reduce outgoings to enjoy more financial freedom.

Some Steps to Take

There are a number of steps you can take in order to ease the financial strain and cut your outgoings considerably. Some of the key things you can do include:

Look at Insurance Plans

Most people have various insurance plans in place, but once they take out insurance many people do not bother to check and compare costs when renewal time comes around. For instance, if you have car insurance, don’t just let it auto-renew for the following year. Instead, shop around for better deals. You can choose from all sorts of plans these days such as pay as you go or buy now pay later car insurance. The same goes for home insurance – instead of renewing automatically each year, make sure you look at costs from other providers to see if you can get a much better deal.

By comparing insurance plans each year, you can save a considerable amount on each of your insurance policies. This all adds up and can make a huge different to your premiums and the amount you pay out each month.

Most people have various insurance plans in place, but once they take out insurance many people do not bother to check and compare costs when renewal time comes around.

Exercise at Home

We all know that exercise is vital when it comes to maintaining good health and staying in shape. However, some people pay a fortune in gym membership fees when it is perfectly plausible to exercise at home free of charge. You can get exercise gurus that give classes online, you could use an exercise DVD, or you can even go for a run each morning by way of getting exercise.

When you have a gym membership, you not only pay a small fortune each month, but you are also tied into this for a specified contract period in some cases. In addition, if you do not go to the gym on a very regular basis, you end up wasting that money. So, cancel the membership and find fun free ways to exercise at home. It will also save you the time and travel expenses involved in getting to and from the gym.

Take Packed Lunches

Many people go to work or college everyday and they spend a lot of money buying food and drink over the course of the day. This includes buying lunches that can work out very expensive once you add them up over the course of the week. Spending a few dollars here and there may not seem like a lot, but when you add it up you will be amazed at what it comes to.

So, in order to eliminate these costs, make sure you take a packed lunch along with drinks and snacks from home. This way, you won’t have to spend money on buying food and drink, and you can also save yourself the hassle of having to go out to the shops partway through your day to buy them. In addition, you can eat more healthily because you know exactly what goes into your lunch and drinks. This makes it an ideal solution for those who want to boost their health as well as their finances.

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Switch Utility Suppliers/Plans

When it comes to utility bills, many people end up paying far more than they need to, and this is just money down the drain. Paying bills such as gas, electric, broadband, and water can be costly, but you need to ensure you do your research and see whether you can get any discounts.

You may be able to get discounts from your current provider, as they may be able to switch you to a different plan or apply a promotion. If not, you should take the time to compare costs with other providers and make the switch where necessary. This is something you can easily do using price comparison sites.

Consolidate Your Debts

If you have a variety of debts, you are probably paying out a small fortune each month and much of this may be interest payments. This means you pay out a lot of money on your debts each month, but the principal balance hardly goes down. In order to tackle this, consider a debt consolidation loan with a low interest rate. You can then bring your repayments down, reduce the interest you pay, and have just one debt to deal with.

All of these tips can help to reduce your monthly outgoings and relieve financial strain.

Prior to COVID-19, the industry’s main concern was Brexit and the uncertainty of a “no-deal” threatening the UK’s position as a global hub for insurance services. Another concern was the impact of IT failures, and breaches arising from cybercrime over the past few years. As a response to this, in December last year, the FCA, PRA and Bank of England asked firms to ensure their operational resilience by undertaking costly and time-consuming mapping exercises.

Unfortunately, this activity was not carried out sooner as only three months later the whole of the UK was placed under lockdown as a result of the pandemic, testing the resilience of its insurance industry like never before.

An industry under fire!

Restaurants, pubs, hotels and gyms were just some of the “non-essential” businesses forced to shut down as a result of government measures to prevent the spread of coronavirus. Many thought that their business Interruption Insurance would cover their financial losses, not realising this might not necessarily be the case. This has resulted in accusations that the insurance industry mis-sold its policies and demands that they should be amended retroactively.

Rightly or wrongly the reputation of the industry has been tarnished and needs to be addressed to restore consumer confidence, especially as the economic damage from the pandemic continues. The Chancellor Rishi Sunak stated last month that the UK is already in "significant recession" given the economy shrank by 2% in the first three months of 2020. A slow recovery is more likely to limit insurance companies’ revenue growth and lead to a fall in demand for products and services.

A brighter future is in reach

If the insurance industry is to return to anything like business as usual, companies within it will likely have to adopt a strategy that prioritises slimming down, restructuring and the use of technology to make efficiency savings.

If the insurance industry is to return to anything like business as usual, companies within it will likely have to adopt a strategy that prioritises slimming down, restructuring and the use of technology to make efficiency savings.

In the first instance, no one wants to talk about job cuts, but the industry has always been a bloated one. Unfortunately “downsizing” is a quick way to reduce expenses and was already happening before the pandemic. For example companies like Aviva announced around 1800 jobs were to go last year and Direct Line stated 800 people would be laid off in February. Such decisions will have to be made as part of a process realigning company portfolios in order to understand which parts of a business are driving value, in order to remove or readjust the parts that are not.

Finally, we should expect a greater impetus towards the digitisation of the industry. Technology will be key to benefiting the customer as we can expect to see a greater focus on service delivery and transparency. For insurance companies themselves, the pandemic has tested their resilience by forcing them to adapt to new ways of working. For example, many sales teams still fail to exploit digital sales fully, instead of relying on onerous manual processes which can take even longer when working from home.

This will begin to change as companies transform themselves digitally but will be a long, expensive process, that relies on buy-in from employees and senior management to ensure success. Efforts will be further stymied by a lack of available talent, as every industry is looking to technology to drive growth, and suitably skilled people to do so are in short supply.

If the insurance industry can get all these factors right and re-establish trust in their offerings, then their future will be a positive one. This will not only benefit our society as a result of the reassurance and protection they provide but will also ensure they can continue to play a key role in supporting the UK’s recovery.

Amidst the many coronavirus-related restrictions and help schemes developed by government and industry, the freeze on car loans reported by the BBC is one of the most interesting and largely ignored. Ostensibly to help buyers to keep their vehicle through financial hardship, it has nevertheless shone a light on interactions between the UK vehicle market and the financial sector. With international travel likely to be subject to continuing restrictions, the humble car will soon be seen in even greater numbers across the isles, creating a challenge – and an opportunity – for the insurance and finance sectors.

Danger on the Roads

A positive benefit of the recent circumstances in the UK has been a huge drop in road traffic accidents and fatalities. With fewer drivers on the roads and an admirable dedication to avoiding danger in order to aid the NHS, the roads have never been safer, according to the Express and Star. However, when driving for all purposes is once again allowed, the roads can expect a huge boom in usage – and therefore accidents. This is already having a notable impact on the insurance sector, already reeling from the volume of claims made against airline companies on refunded or cancelled tickets not paid. Drivers will increasingly be resorting to personal injury legal help in order to gain restitution for a variety of not-at-fault accidents, especially if insurance companies are simply unable to provide the service and return of funds that they would in normal circumstances. With the down tick in this industry, expect the wider financial services industry to sag.

The Finance Sector

With this impact will come a need for greater impetus in the industry – and the amount of drivers back on the road may well create that demand. The amount of cars on the road will not be dictated purely by a need to get out and about, but also a paucity of flights for international travel. Even as prices for UK holidays are predicted by the Evening Standard to explode, cooped-up families will feel little other choice and want to get out and about during whatever summer is left. These holidays lend themselves to automotives, and it’s likely that far more will be purchased over the coming months, giving a healthy and timely boost to the overall health of the industry and the wider financial sector.

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Impact on Loans

With car purchases blossoming, so will a lot of vehicle loans. Reuters note that the UK already has an 86.5% rate of private car ownership via finance. This figure will only continue to shoot up with new purchases, especially of smaller family cars destined for those holiday destinations. The effect, then, is twofold – further money pushed into the automotive financial sector, boosting stocks, and more money borrowed from banks, providing impetus both to the financial sector, to the banks, and to local business. Longer-term, this will also help to provide a bit of joy to ailing businesses who had used the government’s loan scheme. Holidays are great for business, and the sheer influx of British people thirsty for some time out of the house can only be good news for industry.

In many ways, internal holiday travel in the UK provides the perfect solution to a battered and bruised financial industry. Powering the way will be cars, giving impetus across several industries by their very purchase. While insurance may continue to suffer, this trend should correct itself long term, giving a much healthier picture of British finance – and especially as it interacts with the automotive industry.

With lockdown measures expected to continue for at least another three weeks, a significant number of businesses will face further disruption, as they try to balance reduced revenue with maintaining the same level of service delivery.

 A key area of concern for many business owners is how their business insurance will be impacted and what changes they need to consider now employees are working from home.

Review your Employer’s Liability Insurance

Employer’s Liability Insurance protects businesses in the event that they are sued by an employee or ex-employee for a work-related illness or injury.

With employees now working remotely, it is advisable for business owners to contact their insurance provider to check that their policy extends to working from home. If it doesn’t, you should have the option to extend your policy to ensure it covers remote working, for which you should request a copy of the policy terms.

Whilst it is important to ensure you have adequate Employer’s Liability Insurance in place, it should be noted that it is the responsibility of the employee to look after themselves and ensure their home environment is safe.

However, negligence claims could be raised if certain tools were provided for an employee to use in their home environment without the right health and safety equipment. In this scenario, it is important to run through full health and safety procedures and ascertain as to whether the completion of the work is fundamental or if it is safer for operations to be placed on hold until you can resume work in your day-to-day working environment.

Overall, it is unlikely that courts would rule against the employer if a staff member had an accident when working from home, due to the difficulties all businesses currently face in trying to protect their staff and maintain operations amidst the COVID-19 pandemic.

Whilst it is important to ensure you have adequate Employer’s Liability Insurance in place, it should be noted that it is the responsibility of the employee to look after themselves and ensure their home environment is safe.

Business Interruption Claims

Business Interruption Insurance covers the financial losses that result from a direct consequence of business interruption, such as loss of revenue.

If you have business interruption insurance and your business cannot operate due to the impact of the coronavirus, it is worth contacting your insurance provider to see if you can make a claim.

While it is likely that the majority of business insurers will have now clarified their policies and imposed exclusions relating to COVID-19, this won’t have been included in your original policy.

Review the policy terms to see if ‘notifiable diseases’ are covered as part of your business interruption policy, as opposed to a list of specific diseases, together with a clause stating the business must be closed by a competent authority to be covered under the scheme.

In these circumstances, you may be able to commence the claims process and recover your lost revenue.

Increased Cyber Risks

With the majority of employers now working from home, there is an increased cybersecurity and data risk.

For example, there has already been a steep rise in coronavirus phishing emails, with thousands falling for the scam. With workers working remotely, this is likely to continue, and it is, therefore, advisable for business owners to review their existing cybersecurity policies.

If you haven’t yet invested in Cyber Security Insurance, now might be a good time to assess its value. However, with insurance providers constantly updating their policies to coincide with the disruption caused by COVID-19, it is important to review all aspects of the policy before you purchase it.

Ultimately, COVID-19 has caused a period of unprecedented disruption for millions of businesses across the UK. To avoid further disruption, it is advisable to review all of your existing insurance policies to ensure your business remains as protected as possible both in the short and long-term.

What is insurance and why do we need it? 

Since the beginning of time, humankind has been vulnerable by nature and in need of protection against the harms of the unforeseeable future. No one has been able to predict these harms, but we have always been able to protect against them. Insurance is essentially a handshake or peace treaty between a sound, serene mind and a world of tumultuous chaos and unpredictable risk. That handshake or peace treaty has taken many forms throughout time. A nation’s government, for example, will pay billions of dollars to employ a large-scale military acting as a deterrent against an attack by its hostile adversaries, thus allowing its citizens to sleep peacefully through the night. Large information companies have provided the means for cutting-edge, anti-virus products to gain security against threats of malware attacks or data breach, thereby providing a safe-guard for sensitive material. Important figures threatened by criminal organisations willing to release damaging information may offer large sums of money in exchange for the ownership or destruction of the material, consequently keeping their reputation safe.

Where money is being exchanged for security which serves as protection against the threat of some future risk or loss, you’re dealing with insurance.

At Fairbanks Insurance Brokers, we exist to help protect construction companies facing such risks as unexpected property damage, accidental defects, third-party lawsuits, etc. These risks could result in large out-of-pocket sums that may put a contractor out of business and risk his family’s livelihood. Our main purpose as an ethical insurance company is to create a psychological fortress housing and caring for the mental peace-of-mind of our clients and their families in a worry-free, stress-free environment.

What is ethical insurance and why is it important? 

As we all may know, the insurance industry is a sector of the financial industry. It is an industry of other people’s money in which other people are willing to pay large sums of money to secure the peace of mind in which I just mentioned. As licensed insurance producers, we are given access to a large portion of our client’s money, making us part-time caretakers of their money and the most trusted ones to put their best interest first especially before our own.

Unfortunately, where we have access to large sums of other people’s money, we also have an opportunity for greed, dishonesty, and theft which can lead to unethical insurance behaviour and habits. This is precisely where it matters most for insurance producers to exercise their indisputable duty to follow the code of ethics mandated by the Department of Insurance. Without an unwavering commitment to these codes which serve as the cornerstone of our industry’s foundation, it will become gravely compromised and fall short in its purpose to protect the vulnerability of construction workers. For those insurance producers who do exercise their duty to the prescribed code of ethics, they are practising what I call ethical insurance.

Do the right thing when no one is looking.

Ethical insurance is the application of honesty, integrity and discipline to everyday insurance business operations. It is the customary procedure or way of practising insurance which necessitates the discipline to say “no” regardless of how tempting a private reward may be. Our indestructible commitment to the integrity of our work must begin with the very first business decision and end no sooner than the last. Just as weeds grow inseparably from the farmer’s valued crops and become difficult to separate, so do bad habits intertwine with the good ones and the valued crops are tossed with the weeds, just as the broker’s good habits may be tossed with his bad habits in the revocation of his license. This is why ethical insurance practice must be a daily, conscious choice where we aim for 100% execution and pray to fall close to it.

What do unethical insurance practices look like?

In my view, unethical insurance practices look similar to what happens in the following dynamic between a teenager, his naive parent and a drug dealer. The teenager goes to his naive parent seeking money for school books. The naive parent gives the teenager money conditionally, requesting a receipt of confirmation for his purchase. The teenager uses his parent’s money for drugs instead and chooses a drug dealer willing to provide false receipts so he doesn’t get caught. The drug dealer celebrates his sale, the teenager gets a temporary high, and the naive parent suffers betrayal from both of them and unspeakable pain if the teenager's life is taken by a bad accident.

Similar to the insurance industry, the prospective client (the teenager) goes to the job owner seeking to be awarded a project. The job owner (the naive parent) will do so provided the insurance requirements are met as evidenced by a certificate of insurance. To obtain this certificate, the prospective client chooses the unusually low-cost certificate provided by the unethical broker (the drug dealer) who has falsely manipulated the project details and operations. The unethical broker celebrates his sale, the prospective client earns a project deal, and the job owner suffers betrayal from both of them, unknowingly taking the biggest risk and paying the biggest price in the event of a claim or significant loss for which there was not adequate insurance coverage.

At least, the fatality results in quite a show. It puts lives at risk, wastes time, breaks companies apart, destroys reputations, and puts honest people before a judge. I have previously pointed out these unethical dynamics to potential clients, spending valuable time doing so, and was astounded to see that some were unphased, to be concerned by dollar signs only, even asking, “Why should I care, I don’t know the job owner.”  Consequently, I have been deeply disheartened regarding the ethics within my field. The most devastating part to me is not that I have lost potentially valuable clients due to the unethical practice of brokers willing to put others at risk. It is not also that I have witnessed before my eyes the willingness of another to trade or accept unethical services for money. It is that I have tasted and felt the decision of another’s willingness to profit at the harmful risk of an innocent third party. Listen, I am certainly not the sinless one to cast the first stone and no one is, but when it comes to business and the safety of others, I will suggest that we take a deeper look at this unethical dynamic occurring quite regularly.

How do ethical insurance practices look different from unethical ones? 

In continuation of the aforementioned dynamic, let’s replace the drug dealer with an honest pharmacist. The honest pharmacist (an ethical broker) engages in the lawful distribution of medications (or insurance products). The honest pharmacist is not greedy for a sale, assumes the parent’s best interest and carries himself with integrity as he sends the teenager away. The pharmacist does the right thing when no one is looking and is willing to lose a deal for integrity’s sake. He takes into account the ripple effect of his actions and in doing so, forwards the growth and advancement of his industry overall. His character comes before monetary gain and this is evident by his choices, not his sales pitch which is a commonly used device among the unethical brokers seeking to appear honest. Both a drug dealer and pharmacist look credible, so to speak, in a suit and tie. Therefore, we must be careful in distinguishing the appearance of honesty from ethics which account for two very different types of insurance brokers.

One of my most frequently asked questions is: “What is that difference between an honest broker and an ethical broker?”. I like to compare the difference to a person with talent and a person with skills. A person with talent has the natural ability to achieve great things where a person with skills uses and applies that talent in everyday life to achieve amazing things. “Honest” brokers have the potential for greatness but with a missing trail of evidence, they are only halfway there. Ethical brokers, on the other hand, harness their natural talent and apply it to everyday insurance practice. They live out their moral principles and tangibly obtain ethical outcomes that “honest” brokers merely speak of. Ethical brokers have fully arrived at greatness followed by their ethical trail of actions which can number in the hundreds of thousands. Ethical brokers can build empires by their foundational practices and stand apart significantly if we watch what they do.

It is possible to be ethical and to be successful at the same time.

How do you practice ethical behaviour in an unethical environment? 

As I alluded to, there is a widespread practice of manipulating business numbers by altering class codes and changing descriptions of a company’s operations to achieve an unusually low premium. In competition, there is the ethical practice of providing accurate class codes and descriptions, assigning prospective clients the lowest premium possible that is accurately priced. When prospective clients knowingly turn down honest quotes for dishonest ones to the reward and advancement of those unethical practices over ethical ones and to the detriment of the industry’s future - we never fail to feel repulsed. Even worse, after having discovered that another broker would give them a cheaper rate by unethically manipulating the underwriting, some prospective clients then expected us to give them that same rate if we wanted to keep their business. When we exercised our right to refuse to engage in that type of behaviour and explained our position, they told us they would “take their business elsewhere”. Without a tear shed, we replied: “Adios!”. We bade them farewell and didn’t lose sleep over it.

This is our number one rule in business: Ethics must always come before success. We must always be willing to walk away from a deal no matter how great the reward may be. Our God-given conscience allows us to differentiate between right and wrong. We must always follow our conscience even if it means choosing a righteous outcome over a favourable one. In the event we lose a particular unethical business deal, we must celebrate our victory because there was dirty money involved in the first place and there is no place for dirty money in the financial world. In these situations, we must remember that we are not only protectors of our clients, but we are also the protectors of their clients too and the people dependent on them (many times their families and kids). If any client needs to file a claim, we want to make sure that claim is covered correctly to protect all clients involved and those dependent on them.

Is it possible to be ethical and successful in the insurance industry?

There are two dominating types of people within the financial industry: there are people with money and people who wish they had money. The people who wish they had money may be willing to partake in unethical behaviour in order to get money, and the people with money may be willing to do the same to keep their money. Is there a third type? I would like to assert there is, and I believe they are the harder working individuals willing to obtain genuine success and accept profit only at an honest day’s labour. Genuine success is earned, not given or bought, and results in a win-win situation for all parties involved beginning with ourselves and carrying over to the clients we serve. If it turns out that we are not able to do right by ourselves and therefore not do right by our clients, then we shouldn’t sign up for the job of being our client's protector. Finding another industry requiring less self-accountability may be the first decision we make in the right direction, and one that is certainly respectable.

When prospective clients provide false information to an honest broker, there’s not much the honest broker can do. Even the most ethical brokers can be powerless to obtain honest outcomes because providing proper insurance coverage is a multi-step, multi-party process requiring participation from all parties involved. Being ethical and successful is a collaborative effort where one person’s achievement is the whole team’s achievement. Likened to NFL football teams, the quarterback’s efforts alone never got him to the Superbowl. The outstanding teams taking home the Lombardi Trophy did so as a team beginning with excellent coaches leading the offence, additional coaches mentoring the defence and special teams, and- at the very top- the head coaches or the Pete Carroll’s of the world acting as a super mentor and senior leader overlooking the complete coaching cycle.

As a Fairbanks Insurance Broker team, we are among some of those head coaches directing the ethical collaboration of our own members, our prospective clients, our carriers’ underwriters, and the job owners to move our whole team to a successful “Financial Industry Superbowl”. Our Fairbanks Insurance team alone cannot give our vulnerable clients the protection they need in their fight for security of mind. We need others within the construction industry to do their part so we can all give the best service we can.

Unfortunately, bad mentorship is incredibly difficult to overcome. It creates employees who must be spared like the branches of an infected tree. Bad leadership, on the other hand, results in rotten roots. The whole tree must be uprooted altogether to prevent the infected seeds from spreading and mass-producing into an infected forest. Today, we would like to see the potential for all new brokers to be trained in an honest and ethical manner. We would also like the seasoned, unethical brokers to be reminded that it is possible to be ethical and successful at the same time. We are never without the option to start over in doing the right thing for which it is never too late. Having all powerful insurance brokers united in the same ethical causes would create an unbeatable team that we would want to be a part of.

How has practising ethical insurance rewarded you?

Some people say it takes money to make money. We have never found that to be true. With good character and hard work, we believe we can achieve anything if we trust that who we are and what we stand for is enough to reach our goals. Those who believe in our product have first believed in us, and the character we practice is the character we attract in our base of clientele. Up until now, I have spoken of prospective clients and insurance brokers who have disheartened me. I am happy to admit that the greater majority are willing to do the right thing. The clients standing by me in my ethical practices have profoundly motivated me to stay put in my tracks and I would give all of them recognition if I could.

Over the years, prospective clients seeking a better rate from their current insurance policy - upon our comparison of their business operations with their upcoming project requirements - were surprised to learn that our rates were sometimes higher than their broker’s current policy renewal. After taking the time to explain the reasoning behind our higher premiums and the potential dangers of inaccurate underwriting which can lead to a large audit bill or a claim being denied due to “material misrepresentation with intent to fraud”, we then asked the prospective client to return to their current broker to match our quote’s coverages with theirs in a revised version. They were incredibly appreciative that we took the time to explain the importance of making sure they were properly covered. Other times, these prospective clients have decided to become our clients as a result of seeing our ethics in practice. Ultimately, we have gained business doing the right thing rather than turning a blind eye, and many of these clients account for the growing success at Fairbanks Insurance today.

Some of the more priceless rewards I experienced are ones where my clients directly benefited from our consultations on proper insurance coverage. There was a time, for instance, when we talked an H-VAC client into paying an extra couple hundred dollars for a heating device endorsement that he later needed due to having to file a claim caused by a torch fire. Paying a couple hundred extra dollars, in the beginning, saved him a couple hundred thousand dollars of personal money in the end for which he was eternally thankful. Another time we advised a general contractor building an unspecified amount of tract homes to drop his policy that maxed at a predetermined limit of units and take a different policy where the number of units was irrelevant. As it turned out, this was a critical factor in deciding whether coverage was going to be provided and now he is being defended by that carrier in a class-action construction defect lawsuit. Switching policies gave him a fighting chance which will likely save his company. Needless to say, his gratitude was endless. Stories like these, of which I have many, make our efforts to be ethical brokers worth every sweat, tear and sacrifice. They personally reward my soul and provide me with an abundant supply of happiness.

What have been the recent changes in the regulatory environment regarding general liability and workers compensation in the US? 

Underwriting has tightened up significantly over the past few years in the state of California with regard to general liability and workers compensation. It has become increasingly more difficult to place higher risk trades with workers’ compensation carriers when ordinarily the carriers would write the policy immediately. Therein arises another opportunity for brokers to act unethically out of desperation. With worker compensation underwriting departments now working more closely with statistical agents such as the Worker’s Compensation Insurance Rating Bureau (WCIRB), it is far more challenging for intentional acts of material misrepresentation to achieve lower premiums. Still, a simple checkmark on an application rating a “Carpenter” as a “Finish Carpenter” could result in the required rate being up to one-half or even one-third the original price depending on the program in which it’s being quoted. Typically, the unethical broker will attribute these miscommunication errors to the client who is now learning the year-end audit has just generated a massive bill for the proper class codes in which they should have been rated in the first place.

This is usually the time when the unethical broker’s client will hear the “Sorry man, but you read it, you signed it” spiel, leaving the insured to fork out hundreds to several thousands of dollars in unintended additional premium as a rude awakening. While there are legitimate errors & omissions and honest mistakes in miscommunications between the broker and the client, these types of errors are inexcusable and look intended for personal gain especially when the broker claims to be a specialist. This type of behaviour is the hallmark of what I most despise and want to change in our industry. Competing with unethical brokers has been, at times, a frustrating disadvantage. We are essentially boxing with one arm tied behind our backs. We have to be extraordinary if we want to stay in the game.

If you were the commissioner of the California Department of Insurance, what changes would you implement?

Unfortunately, there’s too much “passing the buck around” or denial of responsibility when it comes to errors & omissions within the insurance industry. Too many loopholes exist for the DOI to effectively regulate which allows for these types of unethical operations to persist. There need to be stiffer penalties and more licenses suspended to create incentives for doing the right thing. Consequence and pain have been said to be an effective teacher, and I think we need more of her lessons. There’s a big “he said - she said” blame game occurring which allows the unethical broker to slither his way out of disciplinary action. The client ultimately suffers in the end while the broker moves on to the next vulnerable client making more money unethically. It’s the same record on replay. Granted, the DOI already threatens many disciplinary actions; still, however, these unethical brokers always seem to stay in business. This strongly tarnishes the trust of the consumer in the insurance provider.

Among other small steps, I might at the least mandate a requirement for consultation on significant aspects of the insurance product and have the client confirm or opt-out by signature similar of that to a pick-up of medication at a local pharmacy. In this way, more careful conversations are taking place in lieu of quick conversations on price, sale, bind- and, on to the next quick buck!

Either way, when all is said and done, ethical behaviour boils down to the personal, silent choices we make in our hearts for which no governing agent can control. It’s up to you, my friends. The choice is yours. Go do the right thing and remember that ethical insurance is not a myth. To everyone who has taken the time to read this article, thank you for listening and I hope you will join us in choosing to live as ethical individuals both in business and in life. The rewards are worth it, we promise.

Cyber-attacks are the new normal, so CEOs are looking for ways to protect their businesses from emerging risks. From large corporations to small businesses, everyone is a potential target for hackers.

In 2020, the trend does not seem to be submerging. Hence, many are looking into a form of cyber insurance that would cover them if worse comes to worst.

The question presents itself: what is this insurance coverage, and what does it leave out? And, more importantly, what are its main pros and cons?

Cyber Insurance: What Does It Cover?

In no particular order of importance, cyber insurance covers the following:

1.     Media Liability

Advertising your services can result in intellectual property infringement. Cover insurance covers its consequences (patent infringement not included). Do note that it covers both online and offline forms of advertising.

2.     Network Security

With information and privacy risks abound, you need to keep your bases covered against network security failure. It includes malware infection, business email compromise, cyber extortion demand, and ransomware.

If you have cyber insurance, you can recover first-party costs related to:

• IT forensics,
• data restoration,
• legal expenses,
• notifying your customers of the breach,
• public relations,
• identity restoration.

Cyber insurance covers against malware infection, business email compromise, cyber extortion demand, and ransomware.

3.     Errors and Omissions

If a cyber-attack hits you, you could find yourself no longer able to fulfill your contractual obligations. That leaves your customers hanging.

You won’t afford to focus on consulting, upkeep, and other services. Once there is a cyber incident, all your time and energy go toward addressing its repercussions and minimizing the damage.

Since your customers may not be as understanding as you’d like them to be, it makes sense to protect yourself by investing in cyber insurance.

4.     Network Business Interruption

Modern businesses tend to rely on advanced technology to remain operational. In the event of an incident, some form of interruption is imminent.

For instance, if your provider’s network goes down, you can’t recover expenses sustained as a result and lose profits as well. Think of system failures, unstable system patches, security failures, human error, and more.

5.     Privacy Liability

When a breach happens, it can expose the sensitive data of your customers that lies on your servers. As a result, your business could be held liable.

So if it comes to a class-action lawsuit, there will be legal fees to cover. Regulatory fines resulting from the likes of GDPR are another threat. It could bring your company to its knees. Without insurance, you could find yourself closing down the doors for good.

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What is Left Out?

As comprehensive as it may be, do bear in mind that cyber insurance does not cover everything. For instance, losing value due to theft is not part of it. Nor does it cover the loss of potential profits in the future. It also doesn’t allow you to improve your existing internal technology systems or amass the funds to make security upgrades.

The Advantages of Cyber Insurance

To sum it up, these are pros of cyber insurance:

• Improved standard of security. The work done by insurance companies could improve and redefine security standards.
• Financial incentives to improve IT security. Better insurance coverage at lower rates could become a possibility.
• Greater executive awareness. Recognizing the scope of cyber risks and the severity of their consequences could pave the way for much-needed security initiatives.

The Disadvantages of Cyber Insurance

As with all things insurance-related, there are also some downsides to it:

• Smaller companies could stay behind. If a business operates with a more modest budget, they may not have the funds necessary for insurance. Compared to large corporations, they would have a disadvantage as a result.
• Increased burden of legislation. Lawmakers are not IT or cybersecurity experts. Their moves may not be accurate in addressing the risks involved.
• A false sense of security. After insuring themselves, businesses may not put in enough effort into developing policies and investing in their security.

If a business operates with a more modest budget, they may not have the funds necessary for insurance.

What are The Additional Measures to Take?

As you can see, there is no one-size-fits-all solution. You need to protect your business on multiple fronts.

• Update often. As soon as developers discover a program or OS vulnerability, they rush to release a security update for it. But if you don’t take the time to install it, it may not help you in time.
• Invest in cybersecurity solutions. For starters, you should protect your systems against malware infection by using antivirus software. But there are more solutions to aid you, including firewalls, VPNs, monitoring programs, and so on.
• Educate yourself and your employees on how to protect your business against digital threats. For instance, by knowing what a VPN is and how to use it, employees can protect sensitive data from being intercepted by hackers.

Conclusion

Cyber insurance remains an important consideration for every executive. The more your company depends on technology, the greater is its role. Once again, assessing the risks lies on your shoulders. Depending on the nature of your business, you stand to gain more than there is to lose.

Choosing a health plan is an important decision for your finances and your well-being. Part of what makes healthcare decisions difficult is the fact that there are many different characteristics and options for health plans.

In addition, insurance companies often alter old plans and introduce new ones each year, so you have to pay close attention to the market to get the best deal. In order to help you know what insurance is the best option for you, we're diving in to explain one key consideration that defines some health plans: whether or not each plan is "qualified" under the Affordable Care Act.

What to Know About the Affordable Care Act (ACA)

The Affordable Care Act, sometimes known as Obamacare or ACA, made many changes to the health insurance industry. On one hand, these changes made insurance plans more robust by requiring companies to include and cover more than they have before. On the other hand, these features tended to make insurance coverage more expensive for some people.

Qualified vs. Non-Qualified Health Plans

A qualified health plan is one that’s in compliance with all the provisions of the ACA. It meets all the regulatory requirements, but may be expensive. On the other hand, non-qualified health insurance plans choose not to comply with one or more of the requirements of the ACA and therefore are significantly cheaper.

Whether a qualified or non-qualified plan is right for you depends on your budget and health status. The Affordable Care Act includes subsidy programs to help low-income households get cheaper access to compliant plans. However, they only kick in at certain income levels, which depend on your family size.

There are many people who are in a difficult financial position that cannot easily afford a qualified plan but are making too much to get a federal subsidy that would reduce the cost of such a plan. It becomes a challenge to manage as an individual because going without health insurance is risky, but it also isn't easy to find an affordable plan in the current market.

Non-qualified plans can fill this need because they have lower premiums, but there are some things that you should know before choosing a non-qualified plan.

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What to Consider Before Choosing a Non-Qualified Health Plan

Pre-Existing Conditions

The first consideration is the issue of pre-existing conditions. One of the biggest provisions of the Affordable Care Act was that it required insurance companies to stop making coverage decisions based on whether you have a pre-existing condition. A pre-existing condition might be something simple, like a broken arm, or more complex, like diabetes or cancer.

Under a qualified plan, insurance companies cannot deny coverage to someone on the basis of a pre-existing condition, but a non-qualified plan is not bound to such a distinction. That means that while the plan will be much cheaper, you might face increased premiums or be denied coverage if you do have a pre-existing condition that requires medical care.

Think carefully about your medical needs and any chronic conditions you may have. If they are significant and require care, then a non-qualified plan might not be a good fit for you.

A pre-existing condition might be something simple, like a broken arm, or more complex, like diabetes or cancer.

Substance Abuse

Another healthcare service that will not be covered by a non-qualified plan is substance abuse treatment. The medical care for substance abuse includes many different possible treatments, such as inpatient stays at a rehab facility, therapy, and methadone maintenance treatment.

Substance abuse is a challenging condition and care for substance abuse is not cheap to pay for out of pocket. This is similar to the concept of a pre-existing condition, although the care for substance abuse is less predictable.

Maternal Care

The third major condition that is not likely to be covered under a non-qualified plan is maternal care. Unlike substance abuse and a pre-existing condition, maternal care can be planned, at least to an extent. Maternal care is quite expensive without coverage, and there are many phases of such care.

The doctor visits, nursing consultations, birthing equipment, hospital bed space, medication, scans and imaging, and all the rest adds up. It becomes more expensive as you get closer to your due date, too. If you believe that maternal care will be important for you and your family, then a non-qualified plan is probably not going to cover what you need.

Is a Non-Qualified Health Plan Right for You?

The bottom line is that a non-qualified health plan can potentially save you a lot of money, but these plans are not for everyone due to the potential gaps in coverage. Think about your medical needs and take a look to see if you qualify for a subsidy for a qualified plan. If not, then a non-qualified plan could be a big savings for you.

This is critical since there's a big difference between shopping for groceries and shopping for a policy that will give you the best possible benefits. It is important to note that life insurance is a long-term investment which could either leave you with scraps or help you overcome the challenges that you will be facing as you retire.

As you look towards securing your future, you will have to go through the nitty gritty of comparing the best product to get.

Check out this nifty guide that will help you make the best possible choice.

Get quotes

There are a lot of life insurance companies out there that seem to offer the same types of products. But it's worth noting that there are slight differences in terms of the coverage they offer. The only way for you to notice these differences is to ask for quotes. From these, you can have a better view of the best features of each one. For instance, comparing a comprehensive life insurance quote from Allstate with its nearest competitor can help you focus on those features you want the most.

There are a lot of life insurance companies out there that seem to offer the same types of products. But it's worth noting that there are slight differences in terms of the coverage they offer.

Zero in on the cost

The first thing to consider as you shop around for a life insurance policy is the cost. No two companies have the same rates, so it makes sense to choose one that's affordable. Then again, the policies you are looking to purchase might entail hidden charges and fees. You will find yourself paying more for these hidden charges before your policy matures. The best thing you can do is to ask the agent if there are additional fees you need to be aware of.

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Ask about payment options

Traditionally, insurance holders pay their premiums in person through an authorized agent. This system is slowly giving way to automated and flexible payment options that benefit busy people. When comparing life insurance policies, it's important to know if you can take advantage of various options for topping up your premium, making recurring payments, and setting up electronic transfers using credit cards or platforms like PayPal.

Underscore your coverage needs

Lastly, you will need to know if the policy you are purchasing can help secure the best benefits, whether you're opting for whole life or term life coverage. To make the best possible decision, you might want to consider factors like your age, income, and current lifestyle. Apart from this, you will need to see if you are able to build cash value in the long term on top of death benefits. Making such estimations can help you settle on a policy that ensures long-term coverage and allows you to access the cash value throughout the policy's lifespan.

For many people, choosing a life insurance policy is as intimidating as it is necessary. But with the right approaches, it's possible to find a life insurance policy that can support you in the long run.

Tell us more about the services that Caunce O’Hara offers? What are the most common issues that freelancers approach you with?

Caunce O’Hara offers insurance to freelance contractors including Professional Indemnity, Business Combined (including Liabilities) and Tax Enquiry & Legal Expenses. In addition to these policies, we offer many other types of insurance, all tailored specifically to the freelance sector.

The most common issues that we are approached with are clients being requested to hold insurance, at set levels of cover, for their contract.  A lot of freelancers are unaware of what these insurances are, and our award-winning team are on hand to help them. In reality, freelance contractors are busy individuals who don’t want to waste time completing reams of paperwork to get a quotation and they need their certificates immediately. With Caunce O’Hara, we have a very short online application form, which we can also do over the phone if preferred, and certificates are sent instantly by email. You can apply, purchase cover and access your certificates within five minutes.

What are the most common challenges that freelancers and contractors face when it comes to insurance?

Currently contractors are facing an uncertain period due to the changes in IR35 legislation, come April 2020, whereby they are required to prove that they fall outside of IR35 rather than inside.

A large number of freelancers are simply opting not to do anything at this stage and see if the onus is passed onto others, i.e. their agency, but we, at Caunce O’Hara, are being proactive and are offering a number of ways to assist freelancers in proving they fall outside of IR35.  For example, we have a Tax Enquiry & Legal Expenses Insurance, which covers the cost of defending an IR35 investigation. In addition, as an extension to this, we are offering a Contract Review service which will assist you by letting you know if your contract will pass or fail an IR35 investigation. If your contract fails, we will guide you towards the areas you need to get your client to amend to protect you.

Currently contractors are facing an uncertain period due to the changes in IR35 legislation, come April 2020, whereby they are required to prove that they fall outside of IR35 rather than inside.

What are the particular challenges that insurers in the UK have been facing over the past year in relation to changes in what customers expect in terms of products and services?

The main challenge we have seen is competition and customers expecting price reductions. The insurance sector is very competitive and we pride ourselves on not only our extremely competitive rates but also excellent policy wording. Our products are of the highest standard which is matched by the customer service we provide. We have a great number of clients return to us year on year because we are excellent on price and quality.

Looking forward, what’s on Caunce O’Hara’s agenda for 2020?

Growth!  Whilst it is naturally what all businesses wish for we have a huge appetite for growth and are excited to be going into 2020. With the challenges of IR35, we realise the difficulty facing freelancers over the coming months and our aim is to be there and support our clients. The next few months will be challenging but we are ready to meet them head-on!

In a recent interview with Finance Monthly, Dame Inga Beale discusses the current state of the insurance industry, drawing a contrast with the innovations occurring in banking.

“If you speak to some of the challenger banks, and you say, ‘who are your competitors?’ They say, ‘Oh, we don't really have any competitors. We're so unique, we're so different to the old banks that we don't really regard them as competitors.’” she said.

“It's interesting how they think they've created something so new and innovative that they don't even regard the old traditional incumbents as being a threat.”

It has been a memorable year for FinTechs, culminating in British challenger bank Starling pipping traditional firms to the title of Best British Bank. Business Insider Intelligence reported in October 2019 that 68% of consumers are using a checking or savings account with a challenger bank. 83% of those surveyed claimed they are likely to switch to a challenger bank in the next 12 months. Beale believes it is a focus on the consumer that has driven a revolution.

“Insurance I believe is behind banking. I think it's because we haven't been putting the customer at the heart of what we've been doing. They [challenger banks] have appealed to the young generation much more and have managed to brand themselves in a modern, exciting way. I think insurance has got a bit of catch up to do” she said.

“We [insurers] often traditionally look at things from our internal point of view. We segment customers according to the way we look at them; maybe by postal codes or something rather than the wants, needs, desires of the customers.”

“We often traditionally look at things from our internal point of view. We segment customers according to the way we look at them; maybe by postal codes or something rather than the wants, needs, desires of the customers.”

The insurance industry has also been slower to adopt the innovations of InsurTech firms. Usage-based insurance (UBI) is increasingly becoming the norm but the implementation of technologies such as Robotic Process Automation (RPA) has been slow to market. While 30% of companies adopted this technology to review claims in 2018, no insurers were using it to evaluate the risk of insuring a client in the underwriting process. Despite this, the market for underwriting improvements is set to grow to over 60% by 2020.

“Most of the insurers these days are investing in incubators or innovation labs. But to actually amalgamate them into your existing business is the tough call. There are not many [insurance firms] that have mastered that yet,” says Beale.

“If they don't learn how to amalgamate this new InsurTech and this new technology approach, the interaction with a consumer will suffer. Consumers want a different type of product that's more tailor-made, responsive. We need to think differently and incumbent large insurers, unless they adapt, will be left behind.”

A multitude of choice is available to today's insurance consumers. Beale pointed out the moves the industry has made to simplify the process.

“Consumers want to shop around and the price is important to them, so, lots of companies have responded by providing an online product where they're part of price comparison websites. That means the consumer can make instant decisions,” she said.

“Consumers want to shop around and the price is important to them, so, lots of companies have responded by providing an online product where they're part of price comparison websites. That means the consumer can make instant decisions."

Though price comparison websites have now serviced an estimated 85% of consumers, Beale believes they may already have peaked.

Beale says: “There might always be a place for comparison sites but I think this idea, that you will partner with a firm and they would be your financial support is much more likely to be the future. Therefore, you will have a strong affinity with that firm providing the customer service is up to it.”

“I think you'll shop around far less on price because we'll be using data triggers to feed in automatically, and you'll feel, actually, that pricing is fair because I only paid for the exposure I had on that day.”

Beale also admitted that there is a long way to go before customer loyalty reaches such heights to make a dent in the role of price comparison websites.

“We tend to have people buying insurance products that are very geared to specifics; so people will buy insurance for their car, insurance for their travel, insurance for their home. We haven't yet managed to package that up nicely so that the consumer's life is made simpler.” she said.

“We've got a long way to go to build that ecosystem around an individual and surround you with this nice bubble of the financial protection and support that you need in your life.”

Since leaving the demands of corporate life behind, Inga Beale has become a regular keynote speaker with the Champions Speakers agency, where she specialises in topics such as diversity and inclusion, insurance and business management.

Of course, the rise of Human Factors Analysis Tools (HFAT) has forced financial services firms to push the envelope, but AI is gradually beginning to be integrated into the operations of firms across other industries. Perhaps, one sector which lags behind is insurance. However, according to Nikolas Kairinos, CEO and Founder of Fountech, attitudes are definitely shifting and in large part, this is due to the possibilities presented by AI toolsets.

Indeed, the venture capital community considers the insurance industry to be so ripe for disruption that Lemonade, a US InsurTech company, managed to raise $300 million in seed funding earlier this year. As an AI developer myself, I believe that the technology can drastically improve insurers at all levels, but only if industry leaders understand what AI actually offers and how to effectively integrate it into their organisations.

AI in InsurTech

The first, and arguably, most important part of this process, is having a sophisticated awareness of what AI in insurance actually means. For most firms, the benefits of AI actually come through robotic process automation (RPA); in other words, automating existing processes to save time and resources. For example, insurance AI exists which could remove the need for firms to manually classify documents, write contracts or process claims.

However, the most significant advantage that AI offers to insurance firms specifically stems from the way in which sophisticated algorithms can use vast datasets in order to predict and monitor risk. This would have many applications across the crucial functions of underwriting, pricing and risk management. Going further, the technology could even be used to prevent fraud by detecting tiny inconsistencies in either publicly available data or a client’s financial history.

However, AI doesn’t simply provide a competitive advantage for the forward-thinking firms who employ it, it also benefits policyholders who would enjoy cheaper premiums as a result of lower overheads and reductions in the amount of fraud.

Managing the transition

Still, some within the industry remain apprehensive about the impact of AI on either the employees or customer base of an insurance firm. The first thing is to say that many of these concerns, particularly around data security, are legitimate but it’s important that industry leaders do not see these apprehensions as an insurmountable obstacle. Integrating AI is not about saving resources for the sake of it but rather adopting new tools with the potential to improve the industry as a whole.

I’ve been developing software for professional services companies for years and based on what I have seen, I believe that successfully integrating AI into your services boils down to three things. Understanding the limitations of both the technology and your organisation, working with developers as much as budget and time constraints allow and being critical about where and why you’re integrating AI into your company’s operations.

At Fountech, we think it’s important for firms to understand what AI has to offer the insurance industry, and so we recently released a new white paper which explores how insurers might integrate AI into their business. Ultimately, with a proper understanding of AI’s strengths and limitations, industry leaders can begin adapting their firms to the rigours of the new data-driven landscape.

Towards a more intelligent future

As AI begins to play a central role in the functioning of insurance firms, it’s important that industry leaders remain invested in the technology’s potential to change insurance for the better. At root, this means having a sophisticated understanding of how AI can benefit your organisation but also remaining vigilant to any problems that might arise as a result.

Finally, as we move towards a more data-driven insurance industry, it’s essential that insurance firms begin playing a more active role in the development of new AI either through investment, active feedback, or by providing a breeding ground for new tools to be refined. Now is the time for insurance firms to begin playing a more active role in the development of the tools that are going to fundamentally reshape the industry over the next few years.

This guide will cover the basic and essential information about home insurance policies, so you know where you stand come the unexpected.

What does your home insurance cover?

Most standard home insurance policies cover structural damages, your belongings – as specified in the contract, and liabilities in case of accidents and injuries on your property.

As a homeowner, you have to make sure that you carry both structural and contents insurance, so you'll have lesser things to worry about should disasters like fire or water damage happen.

Typically, home insurance policies also include liability coverage that protects you from and helps you take care of lawsuits and medical responsibilities if someone gets hurts or injures themselves while in your home.

How much homeowner’s insurance do you need?

The amount of your home insurance coverage should depend on what you need and what you want to protect yourself against. That said, three factors usually determine your level of insurance.

1. Lender Requirements

If you're purchasing home insurance as part of your mortgage, your lender will require you to carry coverage of at least the same amount as your mortgage. The reason behind this is pretty much self-explanatory. Your lender will want assurance that if something catastrophic occurs and the property is a total loss, your home has enough insurance to cover the damage.

2. Asset Protection

There are limits to what and how much your premium will cover in case of a disaster or accident. That is why, you need to contemplate on extending it or purchasing riders if you have the money to spare.

Let's say you own plenty of valuable items like antiques, jewelry, or precious artworks. You may choose to have a higher level of contents insurance to protect those assets from loss or theft.

3. Policy Requirements

There are also instances when the insurance company asks clients to purchase specific types of coverage, as they deem necessary. Those who are living in flood-prone areas, for example, may be required to have flood insurance for them to carry a general homeowners insurance policy.

Types of Home Insurance Coverage

Homeowners insurance have four basic types, namely: property, additional living expenses, personal liability, and medical payment insurance. These four, however, are further broken down six different coverages. It is the level of coverage that you need - or want - for each of these six areas that determines your premium.

1. Property damage insurance covers damages to your home caused by fire, wind, or hail. Many policies do not include flood and land movement (earthquakes, landslides, etc.) insurance in their property damage coverage. You may want to consider purchasing separate insurance for those if you think you need them.

• Coverage A is the highest and most important of all as it involves the main structure of your home.
• Coverage B covers all “other structures” or the ones detached from the main building of your home.
• Coverage C covers personal property or the contents of your home in case of loss or theft.

2. Additional living expenses insurance or Coverage D.

• Coverage D covers expenses you may incur from being unable to live in your home due to damages that render it uninhabitable and the renovations that follow.

3. Personal liability insurance or Coverage E.

• Coverage E protects you and the members of your family against lawsuits that result from injury or property damage.

4. Medical Payment Insurance or Coverage F.

• Coverage F pays for the medical expenses of people who accidentally hurt or injure themselves on your property. Note that this coverage does not apply to you or your family.

No two homes and lifestyles are exactly the same; thus, there is no one-size-fits-all home insurance policy. If you really want your homeowners insurance policy to serve its purpose the time you need it the most, you must know what it covers and understand how it works.