Connect with us

Wealth Management

5 RETIREMENT PLANNING MISTAKES TO AVOID

Published

on

Retirement planning is one of the most important financial goals, and the stakes couldn’t be higher. For a successful and secure retirement, Granville Turner, Director at Company Formation Specialists, Turner Little, shares his five retirement planning mistakes to avoid:

 

Don’t underestimate the value of a clear plan:

Whilst retirement doesn’t necessarily mean stopping work completely, for most people it does mean spending less time working. It’s important to understand what you want from your retirement, consider priorities and how you would like to spend your time, as this will most certainly affect your finances.

 

Don’t underestimate the cost of retirement:

Research suggests that 48% of individuals haven’t calculated how much money they need to save for retirement. You may think you will spend less when you retire, but whilst your commuting costs might go down, other expenses could increase. Planning is crucial. Think about your day-to-day spending and factor in other expenses such as holidays – budgeting is a key part of retirement.

 

Don’t rely solely on your pension:

Pensions have traditionally been the primary way of funding this stage of our lives, and still remain the cornerstone of good planning. But pension funds and the contributions you can make have limits, so make sure you consider income from a range of sources from the State Pension, personal or workplace pension schemes, savings, investments or even property.

 

TAX HAVENS

Granville Turner

Don’t underestimate the importance and need for diversification:

Creating a diversified portfolio of assets blended across asset classes is a winning strategy as it reduces the risk of any single asset dragging down your portfolio.

 

Don’t cash out your pension:

30% of individuals accessing their retirement pot under pension freedoms are depositing their cash straight into low-interest bank accounts. The loss of returns aside, withdrawals can have significant tax implications, so it’s important to assess your options before taking the money out of your pension.

If you would like to discuss your specific requirements, get in touch with us today. Our specialist team of experts will deal with matters pragmatically and sensitively, taking the time to meet with you and discuss your individual objectives in detail, in order to provide solutions that are uniquely tailored to your needs.

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top 10

Insurance providers must be ready to tackle quote manipulation as potential fraud rises

Published

on

By

Sam Marsh, director, product management at LexisNexis Risk Solutions Insurance

As road fuel costs reach a record high[i]  and inflation hits a level not seen in 40 years[ii], it is little wonder that reducing motoring spend, including shopping around for cheaper car insurance, is top of the agenda for many people. Indeed, recent reports indicate that 68% of UK adults plan to decrease the amount they spend on driving[iii]. As finances are squeezed, the fact that one in five motor insurance buyers think it is fine to manipulate details in their insurance application to obtain a favourable quote on their premium[iv], indicates that insurance application fraud looks set to rise.

To some, quote manipulation may seem innocent enough, but deliberately misstating key pieces of information is fraud. This can have the knock-on effect of increasing policy prices for all.  More concerning is that individuals deliberately misstating information in their application could find their policy is made null and void if this is discovered at claim and they may also find it difficult to obtain insurance in the future.  What may seem like a little white lie can have long-lasting ramifications.

What exactly is quote manipulation though? Manipulating a quote is when a person applying for insurance (the proposer) deliberately materially changes information on an application throughout the quote journey, to reduce the premium. It could be the address the vehicle is left at overnight, whether it has any modifications or years licence held. Often this is done across numerous quotes to compare results, cherry-picking the best.

‘Fronting’ is an example of application fraud and often involves quote manipulation.  This is where a person (often a father/mother/older sibling) declare themselves as the main driver/proposer, when really it is their newly qualified family member who would be a higher cost to insure.  They will try numerous quotes, swapping out different main drivers, to see how the costs compare.

So how can the shrewd use of data enrichment at point of quote help the industry move the fight against fraud from detection at point of claim, to prevention at the front door?  It comes down to using quotation data intelligence gathered from across the insurance market.

Fraud comes in many guises, but insurance providers cannot fight it in silo. A market-wide quote history database can help identify potentially fraudulent quote behaviour in real-time by comparing quotes across a specific period of time to identify the probability of data being manipulated.  This insight puts insurance providers in a position to check the facts with the customer before policy inception.

It’s not just fraud prevention this quote history data can help with, understanding the likelihood of quote manipulation can also help support pricing and underwriting practices, when used alongside additional data attributes at the point of quote.

Indeed, insurance providers could combine unique insight into how, when and if an individual has shopped for insurance with further insurance specific data sources such as policy history (cancellations, gaps in cover); vehicle history (MOT, valuation, mileage); the presence and performance of Advanced Driver Assistance Systems; and soon claims history to create a 360-degree view of the risk. This can help insurance providers consider the suitability of a product or price for a particular customer, offering them a significantly better customer experience.

Our research suggests that it is younger people who are more likely to manipulate quotes with nearly three quarters of 18–24-year-olds in our recent study thinking any or some adjustment of information is okay in order to reduce their insurance premium[v].  This may not come as a surprise given a recent report has found that the under-30s are disproportionately being forced to bear the brunt of the costs of social care reform and Covid via a 10% increase National Insurance Contributions and freeze on the student loan repayment threshold[vi]. So, the ‘Packhorse Generation’ as they are being dubbed, may, more than other generations, give in to the temptation of quote manipulation.

However, as stated previously, if an insurance provider knows up front the risk of a quote being manipulated, that is their opportunity to query the validity of the data and educate consumers who may be genuinely unaware of the risks of deliberate mis-statements, before policy inception.  This approach can help protect both themselves and the customer from the outcome of fraud.

As economic pressure spirals, insurance professionals have an immediate opportunity to leverage consumer quote information to educate, protect and price customers based on their shopping behaviour.

[i] https://www.rac.co.uk/drive/news/fuel-prices/diesel-fuel-prices-hit-new-record-high-as-uk-moves-away-from-importing-russ/

[ii] https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/april2022

[iii] https://www.themotorombudsman.org/press-releases/tmo-urges-motorists-to-keep-vehicle-servicing-front-of-mind-in-the-face-of-cost-of-living-hike

[iv] LexisNexis Risk Solutions was not identified as the sponsor of this research, which was based on a survey of 1,546 consumers who had bought motor insurance online within the last 12 months and was conducted during April 2022

[v] LexisNexis Risk Solutions was not identified as the sponsor of this research, which was based on a survey of 1,546 consumers who had bought motor insurance online within the last 12 months and was conducted during April 2022

[vi] https://www.if.org.uk/wp-content/uploads/2022/02/packhorse_inflation_press_release_FINAL.pdf

Continue Reading

News

Can intelligent automation ensure the survival of the insurance industry?

Published

on

By

Eric Tyree, SVP of AI and Innovation, SS&C Blue Prism

 

The economic viability of the insurance industry’s current business model has been in question for a number of years. McKinsey’s 2022 Global Insurance Report shows that 52% of the industry’s global equity had a return on equity (ROE) lower than their cost of equity over the past five years. While most insurers predict premiums will continue to rise in 2022, following the 2020 pandemic-induced growth rate contraction to 1.2%, many non-pandemic obstacles remain in place, including changing consumer preferences and the rise of relevance-challenging advanced technologies.

Intelligent automation (IA) has the ability to upend this outdated model, replacing it with an effective and profitable alternative. By integrating IA into the claims, underwriting, pricing and distribution processes, insurance firms can improve margins and productivity, as well as customer and employee satisfaction.

 

Why is the insurance industry flailing?

The insurance industry is in a state of stagnation, struggling to maintain profitable operations. Fee transparency has made it easy for customers to seek out lower-cost options, while growing technology adoption has heightened price and speed pressures, fueling an increasingly competitive landscape.

Property and casualty insurers have struggled to reduce costs in recent years and the overall industry has seen an ROE slightly below cost of equity – with the exception of insurance brokers, which were the only segment to see positive economic growth. These oppositional forces are further compounded by the lack of growing demand in mature markets. The industry is increasingly dependent on price increases, rather than expanding client bases and new coverage offerings.

This changing growth model that relies on price increases is one of the industry’s greatest threats moving forward. The sector needs to unlock latent customer demand, improve value creation and cultivate growth and innovation. Advanced technologies can be leveraged to accomplish this, resulting in lowered costs, optimized customer and employee experience, as well as improved decision-making and productivity.

 

Why has digital transformation become imperative for the industry?

The changing demands of the market require insurance companies to operate at increasingly faster speeds. As McKinsey reports, “What used to take years must now be done in months or weeks.” Such rates of operation can be accomplished by leveraging the powers of intelligent automation. By integrating IA, insurers can reduce their turnaround times, take on higher volumes of applications and drastically reduce error rates, which are more common when human workers are left to conduct repetitive tasks. This gives employees time back and enables them to develop innovative strategies, focus on complex cases and offer tailored customer experiences.

This is especially important as the industry’s competitive landscape has become a “fight for the customer.” Consumers expect the convenience and ease of digital channels but still need the personalized service that only human workers can provide. This is where insurance firms can differentiate themselves – by striking the right balance between automation and tailored human service.

The rapid growth of insurtechs – entities using technological innovations to maximize savings and productivity in the insurance industry – further illustrates IA’s integrality to the industry moving forward. Their threat to traditional insurers is evidenced by global investment in them increasing from $1 billion in 2004 to $14.6 billion in 2021. Insurtechs offer digitally enhanced client experiences and tend to focus on the marketing and distribution segment of the value chain, along with property and casualty products. These behaviors signal value-adding areas to the rest of the industry.

 

How does the insurance industry leverage the power of intelligent automation?

For many insurance companies, the transition away from legacy systems and siloed functions in the face of budgetary pressures can seem daunting. However, insurers can work with an automation partner to ease the process. Such partners enable them to make the most of their existing systems, using digital workers to operate between previously siloed systems and sync data between applications. This method allows insurance firms to incrementally dismantle their legacy systems, rather than being forced into an all-at-once approach.

Using this transitional automation strategy, tasks related to onboarding, data analysis, claims fulfillment and invoicing can still be automated, unburdening human workers and, in turn, promoting innovation and new revenue streams. This automation management will help insurers streamline the customer journey, settle claims faster and ensure compliance with the latest regulations. And, as the returns from IA initiatives free up more resources, insurance companies can further automate processes and deconstruct legacy systems, creating increasing value and returns.

Thomas Miller, a leading international insurance services provider covering 80% of the world’s containers, worked with SS&C Blue Prism to integrate intelligent automation into its operations. It was looking for solutions that worked with its “low-volume, high-value” model and didn’t require implementing costly new IT infrastructures. As a result, the company was able to see significant ROI, increase agility and resilience, process renewal applications 24 hours a day/ seven days a week, improve accuracy while reducing turnaround times, and give underwriters more time to focus on value-promoting work. This ultimately served to improve the customer experience, a key competitive differentiator in the industry today.

Although the demand for insurance is expected to continue to rise this year, especially in emerging markets, the industry’s long-term longevity will depend on its ability to adapt quickly. Advanced digital technologies have the ability to either boost insurers’ competitive edge or render them obsolete. The future relevance of the insurance industry will depend on its willingness and commitment to adapting to this changing environment.

 

Continue Reading

Magazine

Trending

News2 days ago

Wombat partners with Currencycloud to launch its new, free Instant Investment service to open up investing for a wider market.

UK-based micro-investment platform Wombat has partnered with Currencycloud, the experts in simplifying business in a multi-currency world, to launch its...

Business2 days ago

A lack of training and email security solutions is contributing to a rise in email threats targeting the finance sector.

Mike Fleck, Senior Director, Sales Engineering at Cyren   Email remains the most popular and successful attack vector in the...

Top 102 days ago

Insurance providers must be ready to tackle quote manipulation as potential fraud rises

Sam Marsh, director, product management at LexisNexis Risk Solutions Insurance As road fuel costs reach a record high[i]  and inflation...

News2 days ago

Urban Company rolls out health insurance for service professionals in partnership with ACKO Insurance

Health insurance plan to benefit 40,000+ service partners in India Service partners can avail up to 12 free-of-cost online doctor consultations in a year...

Finance2 days ago

Main Factors Accelerating API Security Risks in Financial Services

By: Yaniv Balmas, VP of research at Salt Security   The API ecosystem is exploding and nowhere has API delivery...

Business2 days ago

Automation: the future of supply chains?

By Andrew Scargill, Logistics Operations EMEA at Digital River   Caught between the chaos of coronavirus and fallout from Brexit,...

News2 days ago

Can intelligent automation ensure the survival of the insurance industry?

Eric Tyree, SVP of AI and Innovation, SS&C Blue Prism   The economic viability of the insurance industry’s current business...

Business2 days ago

Time to make your energy future more predictable

– Alistair Booth, MD, Ortus Energy   UK businesses have a real opportunity to lock-in some energy certainty as a...

Top 102 days ago

Signals: Simplifying Trading Experiences

by LegacyFX Trading signals are a way for investors to indicate that the market is moving in a specific direction....

News4 days ago

Rivery Raises $30M B Round of Venture Funding from Tiger Global

With data needs growing and data talent scarcity, there is huge demand for Rivery’s 100% SaaS solution to create an...

Banking5 days ago

Wealth Managers and the Future of Trust: Insights from CFA Institute’s 2022 Investor Trust Study

Author: Rhodri Preece, CFA, Senior Head of Research, CFA Institute   Corporate responsibility is more important than ever. Today, many...

Interviews6 days ago

Q&A with Andréa Jacquemin, founder and CEO of Beamy

Beamy is a fast-growing scale-up that focuses on pioneering a new approach to SaaS management for large companies. Founded in...

News1 week ago

How to reignite your store with streamlined operations and a distinctive customer experience

Colin Neil, MD, Adyen UK   Retailers know that prioritising customer experience is vital to success today. This, amongst the...

Business1 week ago

5 tips to ensure CSR efforts come across as genuine

By Mick Clark, Managing Director, WePack Ltd   Corporate social responsibility – or CSR – is playing an increasingly pivotal role...

Business1 week ago

How to Build Your Credit Up Safely

by Taylor McKnight, Author for Compare Credit   What Is Credit? Credit is money owed by a person that allows...

News1 week ago

PCI DSS Compliance in the Cloud – Everything you should know

Introduction PCI DSS 4.0 is the latest and updated version of PCI DSS that was introduced on March 31st, 2022....

Banking1 week ago

2022 ESG Investment Trends

Jay Mukhey, Senior Director, ESG at Finastra   Environmental, Social and Governance (ESG) themes have been front and center throughout...

Business1 week ago

PROTECT THE VALUE OF YOUR SAVINGS AND AVOID RISING INFLATION PRESSURE

Planning for the next financial year? Former Bank Manager and successful whisky investor, Roger Parfitt, tells us why cask ownership is...

Technology1 week ago

UK Organisations turn to artificial intelligence to fight sophisticated cyberattacks

New research by cybersecurity expert Mimecast finds that email attacks are becoming more frequent and sophisticated More and more companies...

Finance1 week ago

The power of diversity: The need for female role models in FinTech

By Isavella Frangou, VP of Sales and Marketing, payabl.   As our world is constantly evolving, it’s easy to believe...

Trending