Bankers and Property Insurance

LLOYDS has announced plans for a further 15,000 job cuts. That makes me very angry because the people least likely to lose out are the fat cats and Billy Bonus Bankers who have so much cash they don’t know what to do with it. And they are dragging the name of Property Insurance providers down with them as many people think banks and insurance are one and the same.

In my opinion the whole banking crisis provided an excellent opportunity to redistribute the wealth of the country from the rich gamble-ridden clueless bankers to the working class. The irony is that the Government – funded and empowered by the working classes largely, has stepped in and saved the banking system and ensured the lucky gamblers in the banks have kept their jobs and millionaire bonuses despite being responsible for the worst financial crisis in our lifetimes.

It is a reward for failure and better than that – an unbreakable guarantee – screw up and we will bail you out.

You might wonder what this has to do with Property Insurance. I’ll get to that in a moment because I am not finished with the busted but bailed out bankers yet.

The banks cannot fail in a business plan that persecutes the working class. Interest rates at the Bank of England are at 0.5% but mortgage rates are 4-5% with huge deposits needed. That’s an automatic, cannot fail profit – especially when the banks are now cherry picking who they will lend to. Basically if you are lucky enough just to get a loan, then you can sleep restlessly knowing they are profiting mercilessly from you. Through your taxes you are allowing them to make even more profit from you with impunity.

The thing is if you have money and don’t need to borrow, it makes not one jot of difference to you. In fact, if you are an employer, the supply of employment over demand probably means you are paying less for your workers. The rich are nowhere near as effected as the middle or poor of this country.

A recession that is created by the rich bankers and now thanks to a Government that insulates them from any financial penalty is simply creating a new playing field for them to keep their jobs and take big salaries. The rich getting richer.

Do you think if any other business went bust the Government would step in and guarantee its future and allow the Directors to take whatever pay they liked? Of course not – just look at MG, Jaguar, Land Rover etc. Dropped like hot potatoes for foreign firms to snap up at a bargain price and turn into success stories.

And the thing is that because Property Insurance is a financial product, people sometimes think insurance and banks are one and the same. They are not. They offer a financial product that is actually really simple in the case of Property Insurance – if you suffer a loss they will pay out to fix it for you. They make or lose money from calculating the risk of loss, not from gambling on complex financial models.

As ever there is the odd caveat to that – Payment Protection Insurance for example. That particular product was seized by and sold by the banks – miss-sold as it turns out.

Property Insurance from reputable insurers is a distant cry from the activities of the greedy bankers and remains a thriving industry where companies compete for your business.

My thoughts are with the people losing their jobs and suffering due to this bank created recession. Once upon a time you’d trust the bank manager with your life and mistrust the insurance salesman…how times have changed.

Jason McClean