Cost of car insurance soars by 25% in two years

By
Sean Poulter
Last updated at 7:49 PM on 03rd March 2010

Drivers are facing a 25 per cent rise in insurance premiums in just two years. The increases will see the cost of a typical premium soar by £100. Admiral Insurance has revealed it put up motor premiums by 12 per cent last year and plans to repeat the increase in 2010.
Hikes: Drivers could face paying £100 more on an average insurance premium, with insurers blaming increased personal injury pay outsThis reflects official inflation data, which revealed that both car and home insurance have risen sharply in the past year.
Figures from the Office of National Statistics suggest all motor
insurance premiums are up by an average of around 19 per cent in the past year alone. 

Admiral blamed the rise on higher pay-outs on personal injury
claims, made easier by the explosion of ‘no win, no fee’ compensation
lawyers.
Bizarrely, it also claimed it had been forced to raise premiums to
match increases by rivals. It argued that otherwise it would have been
swamped by new business it could not cope with.
A typical driver with a new Ford Mondeo Estate and without any no
claims bonus will pay around £470 for fully comprehensive policy
without an excess.
That is up by by around £50 on a year ago and could rise by another £56 this year to £526.40.
That equates to an increase of £106 over two years.
However, for some groups, such as young men who have recently passed their test the increase could be up to £300. 

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Meerkat pops up to push comparison site in front

He’s not very big, speaks with an inexplicable but undeniably cute Russian accent (bearing in mind his species is African) and he has taken the world of advertising by storm. Who ever thought that a meerkat could do for car insurance what dozens of other campaigns have failed to do — and make it popular.
Comparethemarket.com overtook its rivals last year after the introduction of Aleksandr Orlov, the aristocratic meerkat. Traffic to the website soared by 76 per cent between January and August last year, while its main competitors, the likes of MoneySupermarket.com, Confused.com and Gocompare.com, fell back.
Then they hit back. MoneySupermarket.com dropped Peter Jones, the entrepreneur from Dragons’ Den, in favour of a more offbeat campaign fronted by Omid Djalili, the comedian. Gocompare, which increased its share by 1.7 percentage points to 11.3 per cent between December and January, introduced a mustachioed, opera singer, shades of Cornetto campaigns past.
All this is evidence that marketing spending has increased in the past three years in a congested battlefield — from £35 million in 2006 to £85 million last year.

It is easy to forget, perhaps, that while comparethemarket.com is the fastest-growing of its peers, according to Hitwise, the online research company, it commands only a 6.4 per cent share of the market, compared with MoneySavingExpert.com’s 33 per cent and MoneySupermarket.com’s 27 per cent. There are serious questions, too, amid concerns over impartiality — the comparison websites typically receive fees from companies they compare — which led to Consumer Focus, the watchdog, creating a code of conduct. The Office of Fair Trading is also investigating their role in practices such as “drip pricing”, where buyers spend more than they expect with the addition of extra costs at each stage of the process.
Not that Mr Orlov is too concerned. For him, success is “Simples”.
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Ryanair raises full-year profit forecast

Published: 7:35AM GMT 01 Feb 2010

The airline said it was lifting its forecast for the current year to 275m
euros having previously indicated profits would come in at the lower end of
a 200m to 300m euro range. Ryanair said that a better mix of new routes will
help ensure the money the airline makes from each seat doesn’t fall as much
as it had initially feared.

Micheal O’Leary, Ryanair’s maverick chief executive, has previously said that
Ryanair enjoys downturns as it’s an opportunity to win market share from
rivals. The airline today said although overall market conditions remain
“difficult” it expects to increase market share in Italy, Spain, Scandinavia
and the UK.

However, Ryanair recorded a loss of 10.9m euros in the last three months of
2009 compared with a loss of 118.8m euros in the same period in 2008.

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Acclaimed Security - expert business advice

Published: 12:13PM GMT 26 Jan 2010

Steve van Dulken, British Library Business & IP Centre patent expert

The trade name GuardSafe should, I suggest, not be used as the Greater
Manchester Police registered that name with the UK Intellectual Property
Office as a trademark in 2002. I suggest that a new name be swiftly thought
of and registered to avoid possible litigation.

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Barclaycard cashes in with a new loyalty credit card

By
Sean Poulter
Last updated at 8:55 AM on 26th January 2010

A new scheme would see Barclaycard offering loyalty points to customers
Shoppers could benefit from a ‘loyalty card war’ after Barclaycard announced plans to reward customers who use its credit card with cash discounts in selected shops. Rival loyalty card operators such as Tesco Clubcard, Nectar and Air Miles are likely to see the Barclaycard Freedom scheme as a threat. This could drive them to offer bigger rewards to their customers to compete.
Barclaycard said it has invited 30,000 outlets to be part of its loyalty scheme, which it says will be far bigger than those of its rivals.
From March, the bank‘s eight million UK customers will earn around 1p for every £1 they spend in participating shops and restaurants using its credit cards.
This cash can then be claimed as a discount off any purchases at these firms.
Barclaycard has yet to identify which businesses have signed up to be involved. It seems unlikely that these will include Tesco, or Sainsbury’s, which is linked to Nectar, while many of the department stores have their own store or credit cards.
Martin Lewis, of MoneySavingExpert.com, questioned the value of the scheme.

He said credit cards that offer cashback on any purchase anywhere - usually equivalent to 0.5 per cent of all spending - could be a better deal for consumers.

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Hamburger sales rocket as cash-strapped families ditch posh cuisine for McDonald’s

By
Rupert Steiner
Last updated at 6:42 PM on 22nd January 2010

Families abandoning expensive restaurants for fast food have helped McDonald’s sell a record number of hamburgers in Britain.The UK was McDonald’s best performing major market last year as consumers were drawn to its value meals in the recession.The American chain enjoyed its best ever year in the UK as it sold 87m Big Macs.
Value: Hamburger sales at McDonald’s have soared during the recession
The downturn has meant 83m more customers have flocked to its restaurants with a staggering 1bn wolfing down its cheap Big Macs and Quarter Pounders.It joins rivals Domino’s Pizza and Greggs the Baker in cashing in from the consumer downturn.

The firm said a bumper £465m was added to its annual sales which topped £2bn.It benefitted from revamped outlets offering free Wifi, improved coffee, and salads.Steve Easterbrook, UK chief executive of McDonald’s, said the success is down to increased sales of its breakfast menu.
Success: Steve Easterbrook, UK chief executive of McDonald’s
‘The main attraction has been our freshly ground coffee. We have sold 9m extra cups during 2009. The beans are ethically sourced and the milk used for cappuccinos is British and organic.‘We have also started opening the restaurants at 6am instead of 7.30am and our kick start the day advertising campaign contributed to the strong performance.’The firm has seen growth across its menus, with particular demand for its ’saver menu’ and a new ‘little tasters’ value offer.During the past 12 months it has introduced a saver menu offering entry level burgers at £1, double cheese burgers at £1.20 and Chicken Snack Wraps at £1.59. There has been a 12pc growth in value meals and Easterbrook has invested £95m.”If you have just got a pound in your pocket you know there is always something for you in McDonald’s,” he said.The chain of 1,200 restaurants sells more coffee than American giant Starbucks and is the world’s largest restaurant group.The number of people visiting its stores was up 7 1/2pc with sales up 11pc.Cash strapped consumers have turned to cheap food and entertainment to see them through the downturn.Many are spending their weekend evenings buying take-away food and sitting in front of reality shows like X-Factor rather than going out for an expensive night on the town.McDonald’s has enjoyed a strong run over the past four years after period of decline when customers became bored of the concept.In 2009 it created 6000 jobs and expects to create another 5000 new jobs in 2010 taking UK employee numbers up to 85,000.
McDonald’s has enjoyed 83m more customers in the downturn
‘These are good jobs, and because we hire a lot of school leavers, graduates, and increasingly unemployed people, they are often an important step back onto the career ladder,’ said Easterbrook.The international business helped the broader group report a higher quarterly profit yesterday, offsetting its weak US business which is grappling with high unemployment and rampant discounting.It said sales trends remained positive in January at restaurants open at least 13 months.

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Nokia maps out defence in smartphone battle

By Una Galani, Reuters Breakingviews

Published: 11:36PM GMT 21 Jan 2010

The goal is to boost sales of its high-end devices by leveraging the expensive
2008 acquisition of digital mapping firm Navteq. The move is bold, but has a
hint of desperation. Nokia’s wants to stop rivals such as Google and Apple
from stealing more of its market share.

It’s easy to see why Nokia is frustrated. Smartphones – internet enabled
mobile devices – now account for 15 percent of global mobile phone
shipments. That share is expected to rise to 45 per cent by 2013. Yet
Nokia’s slice of this premium market fell from 44 to 35 per cent between the
second and third quarters of 2009, according to research firm Canalys.

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Goldman’s staff to get $16bn as profits surge

Published: 1:56PM GMT 21 Jan 2010

The most profitable bank in the history of Wall Street saw net profits jump to
$13.3bn last year from $2.33bn in 2008. Revenues more than doubled to
$45.1bn as the world’s biggest financial instituions rebounded dramatically
from the financial crisis.

Goldman has been the target of public anger as some of Wall Street’s titans
quickly return to the era of large bonsues, as unemployment for many
Americans remains a real threat. The bank said today that the amount of
revenue given over to pay and bonuses last year was the lowest in its
history. Its ratio of compensation to revenue fell to 35.8pc from 48pc in
2008.

Like many of its rivals, has Goldman benefited from the sharp rally in equity
and corporate bond prices during the year. Its Fixed Income, Currency and
Commodities division saw revenues of $23.32bn compared with $3.71bn in 2008.

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Housebuilder highlights wall of planning issues

Britain is unlikely to return quickly to the peak rate of housebuilding during the boom of the past decade, the chief executive of Taylor Wimpey has said.
Despite reporting a rise in demand for new homes that was better than expected — running at nearly a third higher than the dark days at the end of 2008 — Peter Redfern said that planning requirements would hold back a wholesale recovery in building volumes.
Mr Redfern said: “At the peak, the industry in the UK was building 170,000 units. That has halved and last year the industry completed around 85,000 to 90,000 units. It will be a very long time before we get back to those those high volumes because of the constraints on land availability and the planning system.
“It is very easy to throw stones at the planning system, but the industry is looking for change from a new government, whether that be Conservative or Labour. There are too many bodies involved in the planning system and we are looking for simplicity and greater clarity.”

The outlook from the loss-making Taylor Wimpey, which completed a £510 million rescue rights issue last year, echoes those of Barratt Developments and Persimmon, its rivals. Both companies have reported a rebound in the housing market, although one that marks a return to stability rather than a new boom.
Last year Taylor Wimpey completed 10,186 homes, about a quarter fewer than in 2008. Mr Redfern said: “Our order book is currently up 28 per cent compared with the end of 2008 and that is better than we originally thought. While there has been an improvement in the market in general, we have also made the best of it with improved margins.”
He added that the number of labourers on its building sites had halved during the recession and that the company was building far fewer apartments. The larger units it is constructing helped the business to report an average selling price of £160,000. While that was up on the £153,000 recorded in the first half of 2009, it was still down on the average £171,000 of 2008.
Taylor Wimpey’s net debt has more than halved to £750 million, helped by its rights issue, but Mr Redfern conceded that borrowing needed to be reduced further. He also said that bank lending fragility could still weigh heavily. Analysts expect the builder to report a full-year loss for 2009 of between £70 million and £145 million. Jeremy Withersgreen, at Cazenove, said: “The tone is cautiously optimistic, while being prudently cautious in relation to mortgage availability.”
Taylor Wimpey shares closed at 40¾p, down ¾p. Before the rights issue they had fallen as low as 3p.
• Smaller housebuilders weakened by the recession could be in the sights of Redrow, their larger rival. The company, led by Steve Morgan, the owner of Wolverhampton Wanderers Football Club, has appointed Barbara Richmond, a mergers and acquisition specialist, as its new finance director. Ms Richmond previously had worked for Inchcape with a remit to expand the car retailer before the group succumbed to a rights issue last year.
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Sky price cut ‘could harm British sport’

By Rupert Neate

Published: 7:32PM GMT 17 Jan 2010

John Whittingdale MP, the Tory chairman of the Commons Culture, Media and
Sport Committee, said: “Many sporting bodies are concerned that if Sky
are forced to cut the price they can charge for Sky Sports it will reduce
the amount they will pay for rights and reduce the money paid to clubs.”

He said many clubs are “dependent” on the money they receive from TV
rights and warned that the plans could affect the nation’s future sporting
success.

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