LOSS OF SUBSIDENCE INSURANCE COVER UPON RENEWAL

Annemos

Good evening again. 
I am feeling more reassured, now.
I have had a reply saying that next year, GL will send me details of agents where the home insurance policies are with the underwriter GL, if they are still in that line of business when I come up for renewal. 
I think that is a fair reply. 
Now my full attention can go back to the Subsidence claim itself, which is in process. 
Thanks once again to you all for the considerable help provided to me. 

Annemos

Please excuse the long post. I am still having problems with all this. (An interesting FCA Report is at the end of this post.) 

This summary may also be useful to other homeowners who may not realise what is potentially being done to them, if they find themselves caught within a complex Delegated Authority Arrangement.

The big problem arises when there is a Subsidence claim. And anybody can have a Subsidence claim..... clay soils, tree roots, drains etc. Please take a look at your policy documents, to see if it is set up to be anything like mine.

A recap again, now I am getting to grips with the terminology: 

My policy was set up under a complex Delegated Authority arrangement with multiple links in the chain:  
D)   Great Lakes  the Insurer     (Part of Munich Re: capacity provider: has the money to back the policy)
C)   UK General       (MGA and the cover holder, does the Underwriting)   
B )   The arranger company: handles complaints etc.      That has now had a change in ownership twice. 
A)   SAGA ('reassurance' for the over 50's):     the Seller. 

(In fact, there is yet another Delegated Authority link in the chain, because C)  then delegates its claims handling, including what repairs will be done, to the Loss Adjuster Company)

I lost my Subsidence cover in the middle of a Subsidence claim this year, when A) and B ) parted company. It took me five months of hard work and worry before C) and D) gave it back to me again.   I have to say, someone at C)  did work very hard to achieve this for me, once they had all accepted what had happened, but it took a very long time to get there. 

But I am being threatened with losing it again next year,  because now C) and D)  have parted company. 

This is awful and very stressful for me, because it all seems to be in violation of the Industry-wide agreement, that once a homeowner has had a Subsidence claim, the original insurer that did the repairs, should continue to offer ongoing insurance cover, even after the claim is closed. This is because of the problems a homeowner will face getting Subsidence insurance from another provider, once they have had a Subsidence claim. This could be even more difficult after Covid, I should imagine.

I think it is also advised that we should stay with the same insurer, just in case another claim has to be opened, so there is no dispute over who is responsible for handling it. (There could be a dispute if the insurer had changed, about whether it is still part of the original claim or if it is a new one, etc.)   Also, I presume, that if the Insurer can just drop the property, as soon as the original claim is finished, then there is less incentive for that Insurer to make sure the original repairs are done correctly. 

So, as far as I can see, to treat me fairly, D) should be offering me cover again next year and should find a way to do it. (Unless they have completely withdrawn from the Domestic Home Insurance market next year.)    C) will have a new Insurance Provider backing them who is under no obligation to cover me. Also, for the reasons above, I would want to stay with D) anyway, if possible. 

I am gathering information to take this to the Ombudsman. But for anybody who is still interested, I have found an FCA Report that raises strong concerns about the potential unfair treatment of homeowners, under such complex Delegated Authority Arrangements. 

Attached to this post, is a brief summary table from the FCA of what is in that report.  The 'Customer Outcomes' part is noteworthy:     "A customer's experience should not be affected by whether the product is provided by one or mutiple firms." 
 
And here is a link to the full report.  Delegated authority: Outsourcing in the general insurance market June 2015 TR15/7   
https://www.fca.org.uk/publication/thematic-reviews/tr15-07.pdf            Parts 3.16 to 3.18 in here also struck me: "Turnover in Relationships". 

This is all so far from what I expected when I took out my Premier Insurance Policy. The Subsidence from the two Council Trees was bad enough. But this extra problem is enough to make one despair. 

(Thank goodness the two trees have been taken down. At least that is something.) 

paddyandstumpy

If you're already in touch with someone at UK General who sorted cover out for you, ask them to speak to Great Lakes to find out where they will be providing capacity to next. 

As you say, they can only continue to insure you if they remain in the UK Property market. 

A very useful and detailed post, and shows the many links in some arrangements. 

Sandtree

paddyandstumpy said:

A very useful and detailed post, and shows the many links in some arrangements. 

From a consumer perspective the above is complete because the buck stops with Great Lakes however in reality there are many more links because Great Lakes will hold reinsurance (you’d imagine with Munich Re at least) and then the reinsurers will retroceed some of the risks out to other reinsurers.

Whilst it makes the full picture exceptionally complicated its this second web that creates a lot of the stability in the system because the risks are spread and diversified.

Annemos

Thank you both for just taking notice of this. I find it all so upsetting, that it is only by passing the experience on and people just listening, that it acts as a release to my stress. So thank you both again.

Sandtree, At this point, I do not care about the stability of the Insurance Market in its entirety; I care about my own wellbeing and my own home and what is fair treatment by an Insurance company to me. 

Note 1:  paddyandstumpy, when one asks that question to both these companies C) and D) about their future arrangements, one is given a reply that basically says "We cannot comment on our future arrangements".

But please see this extract from the recent John Lewis Press Release, which I spotted as soon as it was released. Note that tellingly it does NOT tell us who the actual insurer is, Well, I researched this and contacted Great Lakes with my findings. And Yes, as I suspected, the new insurer of John Lewis is Great Lakes. And Digital Partners Munich Re is their new MGA. They are both in the Munich Re stable. You will see it is quite a chain of Delegated Authority. 
  

" Friday 16th October - John Lewis & Partners has today announced that it has collaborated with four best-in-class experts from within the insurance industry to create a new home insurance product for its customers. The partnership includes Digital Partners, a Munich Re company, providing insurance expertise, the innovation team at Sedgwick managing claims handling, the Hood Group managing customer service and queries in the UK and ICE InsureTech delivering the policy administration solution.
*John Lewis standard home insurance is currently underwritten by RSA. All new quotes for non-specialist home insurance policies from 1 February 2021 will be offered in partnership with Digital Partners, Sedgwick, Hood Group and ICE Insuretech"

Great Lakes has now said they will only find a way to cover me IF my claim is STILL outstanding. They said if my claim is closed, they will not be able to offer me cover, because this John Lewis scheme will not be accepting customers who have had Subsidence in the past. (That is because the new MGA wil not be underwriting homes who have had Subsidence in the past.) Very odd. If they can find a way to cover me in one case,  why can't they do this in the other case?

I do not like that answer, as I cannot see why I cannot be given one of those policies and then a special endorsment be added to that policy to state that the Subsidence element is underwritten directly by Great Lakes. There must be a way, surely? I have passed this on to the CEO of the new MGA for his comments. I am awaiting a reply. 

They also said that they do not feel it is incumbent on them to continue cover for me and that  "I should be able to find a range of products in the market place." Utterly astonishing! Does Great Lakes even understand the Subsidence market and industry? 

Note 2: In letters from the Loss Adjuster this was stated more than once:   "As discussed, on completion of the repairs we will issue a Certificate of Structural Adequacy. In addition, your insurers will continue to offer cover for subsidence (subject to continued payment of the premium)."             I now realise that this was completely false reassurance, because when these Delegated Authority chains throw you out, you are not being asked for a premium! The bombshell was given to me 17 months into the Subsidence claim and just 6 days before my renewal was due. I was utterly disraught and I still am. 

Note 3: I see there is big news today about RSA, John Lewis' old provider. 

Sandtree

I do appreciate that your interests will naturally be more personal however broadening knowledge for others is never a bad thing and most have never heard of MGAs or reinsurance etc.

The $9.6bn purchase of RSA is unlikely to have been of any relevance; less than two weeks ago RSA was rejecting the proposed $9.2bn takeover bid. Intact, who are buying the UK entity, dont have any presence in the UK market so it’ll be a change of parent company initially and take some time for them to make significant changes.

The change of owner could have created a break clause however the deal has gone through fairly quickly from what I can see, and certainly too quick for JL to have made alternative arrangements. Maybe there was a leak before but my quick searches don’t show anything.

Unfortunately your current position remains hoping another route to Great Lakes appears that you can leverage. I am sure I recall you saying you’ve already been through the Ombudsman. 

Annemos

I am awaiting the reply from the Digital Partners CEO and then if I do not agree, I shall go to the Ombudsman. 

For other consumers, this is one of the relevent Ombudsman's cases on this issue. I sent this to Great Lakes but they have ignored its main point, so far     (top of page 2). 

https://www.financial-ombudsman.org.uk/files/61521/DRN2093738.pdf

One wonders how the run offs will be done for John Lewis customers who are still in the middle of a Subsidence claim? 
I never seem to be included in any run-off. 

Annemos

FANTASTIC NEWS. John Lewis customers can now feel reassured about Subsidence, with the new insurance provider Great Lakes.  

The CEO at Digital Partners (the new MGA for Great Lakes), has responded and said that they will find a way to offer me cover when my renewal comes around next July. 

I am so thrilled, I am beside myself! 

I think it is also good that the issue of Subsidence has been raised with the new MGA for Great Lakes; it will have raised their awareness of the issues that need to be addressed for customers who have a Subsidence claim. 

Thank you all for your support and I hope this will be the conclusion.  

Sandtree

Annemos said:

One wonders how the run offs will be done for John Lewis customers who are still in the middle of a Subsidence claim? 
I never seem to be included in any run-off. 

Run off depends who legally owns the customer (this is determined by the contracts between the commercial parties not the policyholder).

In many cases the brand on the paperwork owns the customer and so if they switch underwriter their customers are offered new terms (or declined a renewal) with the new underwriter at the point of renewal. The original insurer’s book in run off then is just the ongoing claims and IBNR/long tail liabilities.

In some cases the underwriter retains the customer so at renewal the offer of terms (or decline to offer terms) switches branding to the underwriter or their chosen administrator. Retention typically is poorer than normal because people had bought into the John Lewis or Tesco brand etc rather than RSA, Direct Line etc but without doubt a good proportion will still autorenew each year. This is more common when the white label brand realises that insurance isnt an easy sell and so simply pulls out (Direct Line group used to sell insurance branded to several football clubs... I mean you’ve got to be a fairly die hard fan to think Aston Villa Home Insurance is a good thing).

Run off is much more relevant with long term insurance like Life or Critical Illness where a single policy can be for 30+ years.

Glad to hear you appear to have gotten the matter sorted for the next few years at least!

Annemos

Thank you Sandtree.
We Subsidence claimants are a needy bunch! Aston Villa will do, if they cover me for Subsidence until I expire!