Car credit insurance

Policyholders will have to lodge an endowment mis-selling complaint within three years of being told that they are heading for a shortfall.

Customers will be sent a warning of the time limit when they have one year of the three-year period left.

Norwich Union also said the time limit will not come into effect until 2005.

Red letters

It is estimated that up to 3.5 million UK households face endowment shortfalls of more than 5,000.

An open-ended complaints system where people could complain up to 15 years into the future about a policy sold 10 years ago is simply unfair Mike Urmston, Norwich Union

Many borrowers were told their endowments were guaranteed to pay off their mortgages, but some of those promises have fallen well short.

Consumer groups are concerned that many people are ignoring warnings about their endowment - and are also unaware they may be eligible to claim for mis-selling.

The general rule is that people must complain within three years of receiving their first “red letter” - outlining a likely shortfall - from their insurance company or lender.

Under industry rules insurers are allowed to ignore complaints made after the time bar comes into play.

Norwich Union has said that it is introducing a time bar to prevent endowment from making mis-selling claims far into the future.

“An open-ended complaints system where people could complain up to 15 years into the future about a policy sold 10 years ago is simply unfair to other with-profit policyholders and could lead to compensation for the wrong reasons,” Mike Urmston, Norwich Union chief actuary, said.

The insurer added that it was keen to resolve genuine mis-selling cases but would not endowment policyholders purely on the grounds that their investment has underperformed.

Norwich Union will give individual customers 12 months notice that a time bar will come into play, twice the period recommended by the Financial Services Authority (FSA).

The fine relates to 50,000 policies sold to customers between January 2005 and April 2006.

The FSA said the card provider had failed to provide full information to customers about policy exclusions.

PPI is a form of insurance that covers people in case they cannot pay loans as a result of illness or unemployment.

It is for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time Margaret Cole, FSA

Capital One is the latest firm to be penalised for sales breaches. Last month, GE Capital bank was fined a record 610,000 for similar failings.

In response, Capital One said it accepted the fine and had amended its sales practices.

Failings

Capital One has some four million customers throughout the UK. It is one of the UK’s biggest providers of credit cards.

The FSA investigation centred on the sale of 335,000 PPI policies relating to credit card debt.

Failings pointed out by the FSA included:

• Capital One failed to send a policy document to more than 50,000 PPI customers between January 2005 and April 2006
• Sales scripts did not ensure adequate disclosure of policy features and exclusions to customers
• Capital One’s monitoring of sales calls was not sufficiently effective.

The card provider said it had taken what the FSA had to say on board.

“We consistently review our policies and practices and had made a number of improvements prior to the FSA’s investigation,” Sanjiv Yajnik, Capital One Europe chief executive said.

“The FSA has recognised that Capital One co-operated fully throughout the investigation,” he added.

The PPI industry is worth an estimated 5.5bn a year.

Watchdogs have been carrying out a widespread investigation into the industry. In January, the BBC learned that 10 banks and lenders would face fines following the inquiry.

“This fine and other recent PPI-related enforcement cases show we will crack down where firms fail to treat their customers fairly in this area,” Margaret Cole, FSA director of enforcement, said.

“It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time,” Ms Cole added.

In some industries where the proportion of staff on the minimum wage is high and margins are low, the increase could have a noticeable effect which businesses will need to forecast accurately.

This could apply most clearly in service industries, where staff costs are high relative to turnover.

It is not uncommon for staff costs in privately owned pubs, hotels and , for example, to amount to over 20% of turnover.

The 7% rise in the minimum wage - which will also mean a rise in National Insurance costs - could therefore mean that anything between 1% and 1.5% of turnover will be taken up by the increase.

Other businesses that employ a high number of staff such as warehouse operatives, drivers and security staff are also likely to notice the difference.

Preparing for the increase

What should businesses be doing? On a very practical level, of course, they need to ensure that their payment systems are ready for the change from 1 October.

Indeed, businesses could be liable for a 5,000 fine (and pay) if they do not implement the increase.

In addition businesses should:

• Assess how much the increase will add to their wage bill

• Work out the extent of the additional National Insurance costs
• Ensure that their financial forecasts for the year take account of the increase
• Consider whether staff on slightly more than the minimum wage will also expect an increase to preserve pay differentials
• Communicate the change to staff.

The increase is good news for those on the minimum wage, and it could also help their employers in retaining them.

Low pay and often hours mean that it is becoming more and more difficult for companies to recruit and hold on to good, reliable manual workers - often the operational backbone of their company.

This increase, in closing the gap a little between the minimum wage and better paid jobs elsewhere, may help some companies to hold on to more of their staff for longer.

Nothing improves morale like a pay rise, after all.

However, a wider problem remains. There has been much talk of a skills shortage in UK plc, at management level and in specialist areas such as IT in particular.

But a skills shortage at the more operational level seems to be becoming just as acute.

How to keep key workers in low margin/low pay industries is a problem that many companies will have to keep wrestling with.

All forecasts point to India’s economy doing well and investors are happy with the stock markets soaring to record levels.

The reasons for the benchmark Sensex (sensitive index) of the Bombay Stock Exchange leaping upwards have been consistent - a booming economy and massive flows of foreign and domestic funds.

Foreign institutional funds pumped in $10.7bn in the stock market last year and have already bought shares worth $1.4bn this year.

But one group that is rarely mentioned in its contribution to the market’s strong performance is the small Indian investor.

Ordinary investors

For years ordinary Indians poured their life savings into property or bank-fixed deposits.

What the investor would possibly make in three years from bank savings, he can probably make in a year or even in months from the markets Madhavi Vora Managing Director, ULJK Securities

It is now becoming clear that many of them are willing to stake a part of their hard-earned money on the markets.

Indian mutual funds have already raised almost two billion dollars since the start of 2006, an indication of the kind of money domestic investors are willing to put in the markets over a long period of time.

Homemaker Anita Shenoy left her job to look after her children and not having that extra income began to pinch.

“So I took a chunk of my savings and invested in the markets,” she says.

Ms Shenoy certainly does not regret it as she has already made about 20% over her initial investment.

“I was getting next to nothing on my bank savings and fixed bonds.

“Then about three to four years ago, when the markets began to move upwards, everyone was talking a lot about gains and money to be made through equities. I could see signs of growth all over and decided to take the plunge.”

She intends to use all the money she makes for her marriage and son’s higher education.

Big gains

Madhavi Vora is the Managing Director of stock broking firm ULJK Securities.

She told the BBC News website that at the moment, capital markets are the only investment option with fantastic returns and this is the reason for domestic investors parting freely with their money.

“Our (bank) interest rates have gone down and no longer provide with sufficient returns on savings.

“People see that Indian markets are giving about 15% appreciation on their so what the investor would possibly make in three years from bank savings, he can probably make in a year or even in months from the markets if he is investing with the right guidance.”

I thought of investing money in the markets because it is giving good returns these days Daksesh Shah Small investor

Another important reason for investors showing faith in the market is the belief that it is fundamentally strong and not being manipulated.

“Most of the shares are doing well across the board and in all sectors such as technology, , , consumer durables and pharmaceutical companies. This means there is definite growth potential in the country.”

While more investors are entering the markets, they still comprise a meagre two per cent of the Indian population.

Most of them usually prefer to put their money in government bonds, insurance schemes or some other financial plan that gives them assured returns.

Playing it safe

Ms Vora says this will change as people’s attitude and approach towards the share market are changing as well.

“Investors move in a herd mentality when it comes to the stock markets. The Indian investor as such has been sitting on the sidelines and watched the index go from 2,700 levels right up to 10,000.

“Now some of them have entered the markets. Other investors will soon follow.”

Despite the great returns and stock market euphoria, a number of investors are fearful of losing their hard-earned money and are prudent in their choices.

Insurance agent and small-time investor Daksesh Shah says he invested a small percentage of his money in the markets because he wanted to put his savings in different baskets.

“I usually prefer guaranteed returns but I thought of investing money in the markets because it is giving good returns these days.”

He says he will not continue with it for much longer even though he is very happy with his investments and returns.

“Investing in stock markets is always risky and you are constantly worried about losing all your money. I will not continue with it because in the end, I want peace of mind.”

And a staggering 87% said that were not treated as a valued customer.

The chief gripes were the of products and jargon, the report found.

However, only 13% of consumers said they would be willing to pay extra to get better service, with nearly half of those surveyed saying that excellent service should be free.

The report’s author Gunter Seymus said: This does not paint a very positive picture in terms of current service levels among financial services companies.”

“This situation leaves considerable scope for companies who can deliver in excess of ,” Mr Seymus added.

Metall-FX is great at developing new ideas.

The company has produced a solid metal finish that can be applied to almost any surface - even a face!

metal surfaces are heavy and expensive. Metall-FX’s process is both much lighter and still durable.

The business is very flexible and looks to meet the needs of its customers.

Many of them have individual so Metall-FX provides a personalised service and products.

Not only does it supply its solid metal finish to customers with different needs but its research team will work on new types of products when people come with new sorts of problems.

The company is always looking for solutions which work and are cost effective.

Research and development is a high priority for Metall-FX.

Just think…

How does strong research and development affect the future of a business?

Next steps

Metall-FX has made a successful start. It has the finance it needs. It has developed a good customer base - and they keep coming. So what next?

The company wants to expand and the people involved have looked carefully at their strengths, , opportunities and threats.

SWOT analysis really helps businesses to plan their future.

R&D is clearly a strength. Once the process has been developed, it can be carried out by other people. R&D, on the other hand, requires special people who think creatively.

The staff are also very good at working with customers to ensure they find a solution which needs their needs at a fare price.

Just think…

Carry out a brief SWOT analysis on a business you know - or your school if you can’t think of one.

The solution

Metall-FX has decided to make the most of its strengths. It is planning to develop the R&D side of the business and outsource the manufacturing process.

This means that it can stay in its original premises which can be used for larger scale R&D.

They can employ more staff who work with customers and come up with great ideas.

Once plans are in place the manufacturing is then carried out by another business in another location.

Just think…

Can you think of any problems that might occur? What should Metall-FX do to avoid them?

Other expansion solutions????

Successful businesses are often in search of strategies for expansion.

If they want to sell more of their products they might go in for new factories, offices or shops, bigger factories, offices or shops - and more staff.

If they want to diversify, they might look at what they are doing and consider the that make sense.

Tesco just used to sell food. Now it sells everything the domestic customer can possibly need from food to clothes to household products and insurance.

It has certainly . What next…?

Just think…

What are the potential gains and risks of diversification?

Aviva, which owns Norwich Union, said it planned to cut more than 4,000 jobs across the country by 2008.

City of York Council said the losses were “a bitter blow” and it would do all it could to support those affected.

In the past year, York has suffered job cuts by chocolate makers Terry’s and Nestle and more recently British Sugar.

Aviva said that half of the job losses were expected to be made through compulsory .

The York centre deals with Norwich Union’s marketing, strategy, IT and finance and employs 3,485 staff.

Aviva said the changes were necessary as consumers changed the way they bought insurance.

It is a bitter blow when a major employer announces such large job losses, particularly when so many are in York Bill Woolley, City of York director of strategy

But workers’ union Amicus described the cuts as ” brutal”.

“They are treating their staff with contempt and clearly have more regard for their shareholder profits than their UK workforce.”

In addition to the Norwich Union job losses, Aviva also plans to close its York office of the BSM driving school by December 2007 with the loss of four jobs.

Strong economy

The council’s director of city strategy, Bill Woolley, said he was shocked and surprised by news of the city’s cuts.

“It is a bitter blow when a major employer announces such large job losses, particularly when so many are in York,” he said.

He said the council had spoken to regional development agency Yorkshire Forward, Business Link, The Learning and Skills Council, Job Centre Plus and York College to see how the organisations could work together to help those who have been made redundant.

“We will be setting up an urgent meeting of all the relevant partners to see how we can maximise our joint efforts,” he added.

“However, despite this news, York’s economy remains strong. The task now is to ensure that all those who are affected by the Norwich Union announcement can benefit from its strength.”

private equity arm is now offering 1bn ($1.9bn) for the business as it aims to trump a 958m offer from German company Allianz.

John Laing agreed to Allianz’s bid at the end of last month, after earlier backing a previous Henderson offer.

Laing builds and schools and owns the Chiltern Railways franchise.

It has overseen more than 50 public sector infrastructure projects under the private finance initiative (PFI).

The firm also built the second Severn Bridge crossing, and outside the UK has been involved in road building schemes in Norway, Poland and the United States.