The Oval group

Clearing snow and ice from pavements and other public spaces

2012-02-09T03:38:00.000-08:00

There’s no law stopping you from clearing snow and ice on the pavement outside your home or from public spaces. It’s unlikely you’ll be sued or held legally responsible for any injuries on a path if you have cleared it carefully. To do this safely follow ‘the snow code’ when clearing snow and ice.

The snow code

1. Be prepared
Before the snow falls have you considered:

Who will decide when snow clearing is required?
Who will clear the snow?
Is clearing snow within their capabilities?
Have you done a risk assessment?
Have you provided suitable snow clearing equipment and materials?
Have you provided specific training on the use of equipment/materials if necessary?
Have you made arrangements to clear snow before employees/visitors arrive at the premises at the start of the day if this is necessary?
Are arrangements in place for further snow clearing during the day as necessary?
What if the snowfall is so heavy that you have to suspend a service or restrict access to the premises?
Unfortunately claims from falls on snow/ice are still common; it would significantly improve your chances of defending a claim if you have written evidence of the action you have taken.

2. Prevent slips
Pay extra attention to clear snow and ice from steps and steep pathways - you might need to use more salt on these areas.

If you clear snow and ice yourself, be careful - don’t make the pathways more dangerous by causing them to refreeze. But don’t be put off clearing paths because you’re afraid someone will get injured.

Remember, people walking on snow and ice have a responsibility to be careful themselves. Follow the advice below to make sure you clear the pathway safely and effectively.

3. Clear the snow or ice early in the day
It’s easier to move fresh, loose snow rather than hard snow that has packed together from people walking on it. So if possible, start removing the snow and ice in the morning. If you remove the top layer of snow in the morning, any sunshine during the day will help melt any ice beneath. You can then cover the path with salt before nightfall to stop it refreezing overnight.

4. Use salt or sand - not water
If you use water to melt the snow, it may refreeze and turn to black ice. Black ice increases the risk of injuries as it is invisible and very slippery. You can prevent black ice by spreading some salt on the area you have cleared. You can use ordinary table or dishwasher salt - a tablespoon for each square metre you clear should work. Don’t use the salt found in salting bins - this will be needed to keep the roads clear.

Be careful not to spread salt on plants or grass as it may cause them damage.
If you don’t have enough salt, you can also use sand or ash. These won’t stop the path icing over as well as salt, but will provide good grip under foot.

5. Take care where you move the snow
When you’re shovelling snow, take care where you put it so it doesn’t block people’s paths or drains. Make sure you make a path down the middle of the area to be cleared first, so you have a clear surface to walk on. Then shovel the snow from the centre of the path to the sides.

6. Offer to clear your neighbours’ paths
If you are aware that any neighbours (flats above the shop or other nearby domestic premises) will have difficulty getting in and out of their home, offer to clear snow and ice around their property as well. Check that any elderly or disabled neighbours are alright in the cold weather.

Please contact your local Oval Risk Services Consultant if you would like assistance with these or any other risk issues.

http://www.theovalgroup.com/

Road Risk Management - Some of the Issues Organisations MUST Manage

2012-01-23T09:03:00.000-08:00

All organisations working in the UK who have employees driving for business have a duty to ensure;

Renewal of the photo ID driving licence so that insurance continues to be valid
Duty of employers to check that employees licences are valid
Training for professional drivers (CPC training)

Employee Driving Licence Renewal
Photocard driving licences expire and should be renewed every 10 years. Do you know when your employees’ licences expire and that if they are not renewed, the insurance cover is not valid for that driver? We recommend a simple system of routine checks and reminders to avoid this problem.

Employee Driving Licence Checking
Employers have a duty to check that drivers are competent to drive and have a valid licence to drive a vehicle before allowing them to drive on business. This duty is on-going, so the checks must continue in case an employee later loses his/her licence. Typically employers ask to see and copy licences at routine intervals e.g. 6 or 12 months, but over the years we have found cases where the licence presented has not been valid, even though it appears to be acceptable. DVLA now offer a facility to have licences checked to be absolutely sure it is valid. The facility is provided through various licenced companies and generally costs up to £20 per check depending on numbers. There are of course procedures to cover data protection issues and these are managed by the service provider.

The frequency of checks can be agreed with the service provider. For example a new employee could be checked as part of the interview process (with their approval). Existing employees with no points and doing very little mileage might be checked annually but an employee with 9 points who does high mileage might be checked every 3 months to protect the organisation and those who may be affected by the actions of that employee.

Driver CPC Training
The Driver CPC (Certificate of Professional Competence) is for LGV (Large Goods Vehicles previously HGV) and PCV (Passenger Carrying Vehicles) drivers who drive professionally throughout the UK and is a legal requirement of EU Directive 2003/59. It became effective in September 2009. The aim is to improve the knowledge and skills of professional LGV and PCV drivers throughout their working life.

The important issues for employers are:

New drivers must obtain their licence for the class of vehicle they will drive as well as the CPC before they can be paid to drive
Existing drivers must complete their Periodic Training by September 2013 (PCV) and September 2014 (LGV)
All drivers must complete a minimum of 35 hours of Periodic Training every 5 years to maintain their CPC

There are exemptions for driver training, emergency situations, etc, but the above issues apply to normal working arrangements.

Like to find out more? Contact Neil Hodgson on Tel: 01484 411 121 or email neil.hodgson@theovalgroup.com

http://www.theovalgroup.com/

Newsflashes for Charities

2012-01-13T07:04:00.000-08:00

GiftAid Extended
From 2013 charities and amateur sports clubs that receive donations of less than £10 will be able to claim GiftAid. This will be the first time that charities will be able to claim GiftAid on the small change collected in buckets and tins to the tune of 25p for every £1 collected. This change has been agreed to overcome the issue of a donor always having to complete a form to permit the GiftAid which is obviously not practical on such small amounts. However, from 2013 each charity will be able to claim up to £5,000 per year as GiftAid without donors having to complete the standard GiftAid form.

Payment Card Risks
As reported in Third Sector magazine’s online news page, delegates at the International Fundraising Congress were told that charities without Payment Card Industry Certificates could be fined or banned from processing transactions. The driver for this is the credit card companies and their targeting of fraud. Any organisation that stores or processes credit card details must have a Payment Card Industry Certificate to demonstrate compliance with the standards set by the industry.

To date it is believed that credit card companies had so far been concentrating on contacting large corporations to ensure they had these certificates, but they are now suspected to be moving to charities. Do you have a certificate? If you do not then there is the potential for you to be fined although we would hope that some leeway will be offered to charities in terms of identifying how to obtain the certificate and agreeing a deadline for this. Some financial advisers are suggesting that if you do not have one then it might work out best if you approach Visa or MasterCard directly in the first instance. The downside is that there will be a cost to achieving certification which relevant experts have cited as being between £7-£35,000 and the process will take somewhere between 2 months and 1 year.

Insurance Market Update – the Reinsurance Market
I am pleased to let you know that the two important reinsurance meetings (in Monte Carlo and Baden Baden) have now taken place and NO increased premiums will be required by the reinsurance market from your insurers. This should maintain the current ‘soft’/highly competitive insurance market for at least another 12 months.

Like to find out more? Contact Alyson Pepperill on 07824 492 665 or email alyson.pepperill@theovalgroup.com

http://www.theovalgroup.com/

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Will Santa get his e-mails?

2011-12-09T04:22:00.000-08:00

How IT systems and software is critical to you during this festive period.

It’s that time of year again; mulled wine, turkey in abundance and if not the sound of sleigh bells it is certainly a time when the sound you want to hear most is cash registers ringing. The busiest time for the retail sector every year is in the lead up to Christmas, and whilst you may be insured for the traditional perils of fire and theft, are you covered for your IT risks?

Dependence on technology means that as you are looking to maximise your sales over the coming weeks and into the January sales simply means you cannot afford to lose your IT systems. The reliance on “Point of Sale” technology, stock management systems, and credit card payments, as well as web sites for online trading means that the threat landscape affecting your business has changed.

What would be the effect on your business if the technology controlling your cash registers fails and transactions can’t be processed for an hour, a day, a week due to the introduction of a virus?

How about the effects if stock management system crashes and the shelves are empty with goods still sitting in the warehouse?

Loss of your website could mean that customers use a direct competitor instead of you buy what they need. In addition this is also a time where there is a heightened activity by criminals looking to exploit weaknesses in systems, whether directly by scamming cards or more invisibly from another location and accessing personal details.

Under traditional commercial combined policies there is no cover for the costs to the business of repairing damage caused to systems that is not caused by a physical peril, such as fire or theft. It follows that there is also no cover for the business interruption losses.

Traditional Retail

If you rely on your customers coming through the doors and purchasing their Christmas goods, then it is critical customer’s transactions can be completed. From presents for the kids, to the food for Christmas Dinner, consumer’s habits have changed so that the majority of customers are now paying by a card of some sort. If the card payment system becomes inoperative or compromised in any way then the ability of stores to trade will be severely affected.

In addition, if you customers find themselves victims of crime, this may mean you could also be on the receiving end of compensation claims to refund the customers. In addition you may find yourself incurring costs to notify affected customers as well as having to provide credit monitoring and cost. Below are some real examples of how other retailers have suffered.

1.) In May this year giant US retailer Michaels Stores discovered that at least 90 PIN pads had been tampered with and thieves were able to skim card details and pin information. Threat of action has already commenced with some claims running in to thousands of dollars. http://www.infosecurity-magazine.com/view/17917/theft-of-michaels-customer-card-numbers-extends-nationwide.

2.) This follows on from the $40M settlement by TJ Maxx to customers after it was discovered their systems were hacked and customer’s credit and debit card information was stolen. http://www.bankinfosecurity.com/articles.php?art_id=648

Managing the supply chain is also critical at this time of year. Whilst you may know who your key suppliers are and ensured that you are not dependant on any one, a failure in the stock systems can result in insufficient supply or goods are isolated in the wrong place. The increased reliance on technology to manage these supply chain matters means that this is a key vulnerability for many stores. A collapse in the stock management systems can mean that sales opportunities are missed for example, or if dealing in perishable, could incur costs for these to be destroyed.

Online Retail

The advancement of technology has seen a paradigm shift in how people actually make purchases. Avoiding Christmas crowds and a possible repeat of last years weather means more and more people will be looking to do much of their shopping online this year.

As the festive period ramps up it is expected that customers will spend of around £418 million and £406 million on the 4th and 5th December respectively. This research carried out by Centre for Retail Research, Nottingham and commissioned by Kelkoo in its article “Christmas Spending in the United Kingdom 2011” estimates that one fifth of Christmas budgets will be spent online a total of £13.4bn and an increase of 16.3% from 2010. A further £1.64bn will be spent on mobile shopping.

If you are selling online keeping your website running is critical, also protecting customers information is equally vital, the increased distribution channels also means increased opportunities for criminals.

Reputational Risk – Protecting your brand

For both traditional retail and online business the consequential loss of business can be often quantified by reference to previous years trading, however the reputational cost to your business can often be far greater still and have a long term impact. It has been shown that following a technology breakdown, whether deliberate or accidental, there can be substantial loss of share price, sales and market share. It is therefore important to react quickly to any incident that could impact the brand value of the business.

Insurance and Risk

Whilst solid risk management, back up and redundancy can mean these technology based perils can be mitigated, there is always chance for the unexpected whether through criminal activity, accidental introduction of a virus or plain human error.

Whilst you will continue to lock your doors and put on their alarms you still by insurance for fire and theft, you should also be taking the same attitude to the IT risks and exposures.
As well as providing cover for claims made by third parties we can arrange polices that will help meet costs incurred by a business including; notification & credit monitoring costs, rectification of the fault as well as business interruption for loss of profits or revenue. We can also build in a degree of reputational cover in the form of PR costs to help protect your brand.

We have a number of solutions that we can provide to our clients with bespoke Oval wordings. If you would like further information on this please contact me.

For further information please contact Richard Hodson, Head of Technology, Media & Entertainment on 020 7422 0193 or email richard.hodson@theovalgroup.com

http://www.theovalgroup.com/

Does the tragedy on the M5 mean the end for Firework and Bonfire displays?

2011-11-08T01:22:00.000-08:00

Oval Insurance Broking takes a look at the possible side effects of the unproven allegation that the local Taunton firework display played a role in Friday night’s accident.

Bonfires and firework parties are hazardous activities individually and more so in combination especially when families are attending in numbers. With as yet unproven allegations that drifting smoke from fireworks adjacent to the M5 near Taunton being cited as a possible cause of the motorway carnage that happened on Friday night, event organisers will be concerned about the response of their insurance protection.

Undoubtedly, if the allegations are proven insurers involved in the crash will look to recover outlays from someone else.

Event policies
Most commercial organisations will be buying a Public Liability insurance, covering damages and legal costs in relation to legal liability claims from third parties, who are injured or have their property damaged as a result of the negligent act. Policies usually have cover included for defence costs against certain criminal allegations particularly if there is a breach of health and safety legislation.

In the case of the M5 motorway accident, for any of the firework display organisers to be found liable to pay compensation for damage to the vehicles, the road and street furniture and for personal injury, negligence would have to be proved. If the smoke escaping from the site of the display is found to be a contributory factor, it is possible that existing legal precedent has created a strict liability and the organisers are likely to be liable - a well-written risk assessment investigating the foreseeable consequences of things getting out of control might be a mitigating factor.

Public Liability policies for commercial organisations are intended to cover the activities of that organisation which have been declared to insurers. Whilst it might be that an annual policy includes a firework party usually they are notified to insurers as and when they happen and additional premium paid particularly if there is a charge for entry. Where the party is an annual event for a fund raising committee or is a pure one-off commercial venture it is usual for a separate insurance policy to be purchased which is available via schemes specifically designed for that purpose.

Household policies are not so restricted. Claims in negligence involving family fireworks would normally be covered by household insurance. If an entrance fee or contribution has been charged insurers might take a harsher line unless the fee is for charitable causes.

Whilst the maximum amount payable on Public Liability insurances can go into hundreds of millions of pounds, the most common limit is around £5m which could easily be exhausted in this tragedy.

If you would like further information regarding this matter, are concerned about your own upcoming event, or would just like the peace of mind of talking to an expert please contact Emily Kenna, our entertainment team leader, who specialises in firework display insurance on 0117 300 6161 or drop an email to emily.kenna@theovalgroup.com.

http://www.theovalgroup.com/

Stockmarket Volatility and Economic Issues

2011-10-21T07:43:00.000-07:00

As we are all too aware, stockmarket volatility and economic issues remain centre-stage and virtually dominate the news at the moment. Each day, the issues seem to morph and various “talking-heads” suggest different solutions. I am reminded of the description of the Northern Ireland troubles which said “if you understand the solution to this, somebody hasn’t explained the problem to you properly!”

We can all see the problem in the Eurozone and with Greece in particular; it is just that the solution remains tantalisingly vague. Those of us with a Classical bent may recall that Tantalus had annoyed the Gods and was punished to suffer perpetual thirst and hunger by standing in a river which ebbed away as he bent down to drink and a bunch of grapes above him moved out of reach as he tried to eat them. As private individuals, each time we feel we have a grasp of the situation it somehow changes; usually with the addition of several zeros to take us into the language of zillions we used as children; as a proxy for infinity.

In today’s Global village with instant communication and technology, Greta Garbo’s wish “to be alone” is more difficult to achieve – we are now all connected. Hence, what happens in the Eurozone impacts Wall Street and elsewhere; as well as vice versa. Speaking generally, we as individuals have borrowed too much money without thinking through how we will repay it and this certainly applies to many Sovereign countries. Timo Hannay once said “the future is a foreign country” but it is one we all have to visit as the stark reality of balancing the books looms upon us. We can perhaps describe this as The Greek Moment which has now rudely arrived.

It is obvious to everyone that Greece has borrowed far too much in a hedonistic combination of rampant consumerism coupled with a laissez faire tax collection policy. The apparent easy solution is to cut them adrift and adopt the jungle mantra of the survival of the fittest. The problem is the inter-connectedness mentioned above. Most of the massive Greek debt has been lent by European banks; many of whom could be financially holed below the waterline if this were written off. This in turn would entail further bank bailouts on an enormous scale and the whole Eurozone pack of cards could come tumbling down.

When the Euro was formed I certainly thought that brains far bigger than mine had planned what to do if it all went to pot. We now realise this was not the case; which equates to a wealthy marriage of convenience without a pre-nuptial. This apparently schoolboy error arose because a Eurozone break up was considered impossible and unthinkable. So, will the unthinkable happen? Regrettably, the continuing vacuum of political leadership in the Eurozone has created uncertainty and panic which has been seized on by the markets.

A workable solution in two or three months simply won’t do when the stockmarkets work in minutes and seconds. The politicians need to get ahead of the game, then rapidly agree and implement a radical and substantial package to put the Euro back on track towards robust good health – a series of sticking plasters won’t do; this needs major surgery. Germany can bleat as much as it likes about the unfairness of it all, but it will be affected as badly as the rest of us if the patient doesn’t recover.

The German on the equivalent of the Clapham omnibus might well ask why they should bail out the profligate Greeks. Well, there is a valid reason. An independent Sovereign nation (such as the UK) has three main weapons to tackle a faltering economy – devaluation, dropping interest rates and a massive public spending policy to create jobs and economic output.

Unfortunately, those seventeen countries in the Euro do not have the first two options – they cannot independently vary interest rates or devalue. Since the Drachma and Deutschmark became extinct, all Euro countries have the same interest rate and parity of currency. If currency union had not occurred, the Drachma would have collapsed and the Deutschmark would have risen spectacularly. This means German exports would have been vastly more expensive and, as the Eurozone is its biggest trading partner by far, the indirect benefit to the German economy has been enormous.

Unfortunately, Angela Merkel and her coalition have been playing to the populist gallery, promoting an almost xenophobic view that Greece (and for that matter other weak economies such as Ireland and Portugal) should be left to sort out their own problems. This has come back to haunt them as the required massive German support to stabilise the Euro is less popular than ever at home and politicians don’t want to vote themselves out of office.

So, where do we go from here? The latest three-pronged proposition would appear to have potential. Firstly, a re-capitalisation of European banks; either via their own fund raising or European Central Bank (ECB) loans. Secondly, a massive increase in the size of the European Financial Stability Fund (EFSF); effectively underwritten by all Eurozone countries (and including the UK). Thirdly, a managed default for Greece whilst still allowing it to remain within the Eurozone. This could perhaps take the form of either ring fencing her debt or substantially revising the repayment term and interest rate of her debts; coupled with a substantial capital write-down. This will require a united front from all Eurozone countries and an acceptance that some sharing of the pain by everyone is inevitable.

It is early days yet and there remains much manoeuvring and even bullying to implement something along these lines. This will happen; we just don’t know in what shape and in what timescale. At last it seems politicians have woken up to the gravity of the situation and that serious action is needed now – that tin can simply cannot be kicked down the street any more.

Will the World end tomorrow or later this year? I seriously doubt it. Ultimately, the politicians will fudge a workable solution and some sort of stability will once again reign. It is likely that volatility and uncertainty will remain the order of the day for some months yet. However, those very same conditions create buying opportunities as periodic panic selling does not discriminate between the good, bad and ugly. Nimble investment managers can take advantage of this; both with tactical adjustments to a portfolio and maintaining a longer term strategic outlook. The short term “chatter” should not be allowed to weigh too heavily when compared to the good economic news that is still out there and yet too easily drowned out into a deafening silence.

Time in the markets rather than timing the markets still remains a sound mantra. Let us not forget that virtually all our clients will have well diversified portfolios with “shock absorber” characteristics that protect them from the worst of market falls. Portfolio managers will be constantly assessing the individual components in those portfolios and making adjustments where appropriate. In the longer term journey of an investment strategy, a gentle nudge (rather then a violent swing) on the tiller is the best way forward; with an understandable but emotional knee jerk reaction to the latest bit of gossip or news best avoided. Churchill may have said “democracy is the least worst form of Government” and we should perhaps remember that the Euro is the least worst form of currency for the Eurozone!

Peter Osborne
Investment Director

www.theovalgroup.com

LCCC Cricket Sponsorship Turns Gold For Oval

2011-09-09T06:57:00.000-07:00

A high profile and emotional victory in cricket’s showpiece event reaped huge dividends for the Oval group, chief sponsor of the triumphant Leicestershire team.

The Friends Life Twenty20 Final earned massive exposure for the Oval brand and strengthened the company’s successful association with the world of cricket.

Oval CEO Phillip Hodson, a former Yorkshire player, is President Elect of the MCC, the world’s most famous cricket club, whose members include cricketing legends such as Sir Ian Botham and Sir Garfield Sobers.

The Leicestershire result is a welcome return on its investment for the insurance broking and financial services group, which has been instrumental in turning round the fortunes of “the Foxes” since becoming main sponsor. Oval has developed a strong connection with Leicestershire that has helped the Club overcome financial difficulties. In return, the club provides traditional sponsorship benefits as well as helping Oval to develop new business relationships in the East Midlands and the world of cricket.

The Oval name features on Leicestershire’s team shirts, earning hours of prime time television exposure during Twenty20 matches, as well as pages of national and regional newspaper coverage.

Oval’s East Midlands Managing Director, Stephen Foot, said: “As proud sponsors of Leicestershire County Cricket Club, we are absolutely delighted with this result. The team played a phenomenal game of cricket and thoroughly deserved the win.

We have had a relationship with the Club for over 25 years, initially as their insurance broker, and we then developed the relationship to include sponsorship. There has been excellent commitment by the Club to work with the Oval group to develop our profile and develop our business too.”

Leicestershire’s star wicketkeeper Paul Nixon said: “I’m overjoyed to have won the trophy with the support of Oval group as head sponsors, who backed us through thick and thin. I’d like to personally thank both Stephen Foot and Phillip Hodson, and it’s wonderful we’ve won this trophy in the year that Phillip is President Elect of the MCC. It’s so important for us at Leicestershire to be backed by quality companies, and we’re absolutely delighted with our Oval group partnership.”

The Twenty20 triumph was especially emotional for Nixon. It was the last game in his career, and he marked it with a flying catch to dismiss Somerset’s danger man, Kieron Pollard.

The Foxes reached the Final when Will Jefferson hit a winning six in the one-over eliminator – the cricketing equivalent of football’s penalty shootout - against Lancashire after a drawn semi-final. In the Final itself, Josh Cobb took four wickets and was named man of the match.

Two days after the Twenty20 victory, the Oval name was on show again in front of a sell-out crowd at Grace Road as Leicestershire took on India ahead of the tourists’ one-day series against England.

For further media information contact Duncan Hopwood or Kirsty Wilby on
0116 254 4472 or email kirsty@hopwood.co.uk

Organised Demonstrations Turn Ugly

2011-08-09T20:02:00.000-07:00

Are you at risk from more than just the angry mob?
Copycat incidents of looting and criminal damage have been breaking out in major cities in England after a peaceful demonstration in Tottenham on Saturday which turned ugly.

The disturbances have been labelled riots by the media. Riot has a specific definition in law, under the Public Order Act, involving concentrated, organised unlawful, violent action by 12 persons or more.

Standard Cover - what does it include?
Standard accidental damage property insurance will include the perils of fire, malicious damage and riot. The standard peril of malicious damage will not cover damage in furtherance of theft - which seems to have been the motivation for a number of the attacks.

Traders
Most commercial risk combined insurances will cover losses caused by malicious damage, riot, fire and theft involving forcible entry. Business interruption policies covering loss of gross profit usually have similar insured risks to the property damage insurance and will pay where the business is affected and turnover has been reduced following an insured risk arising. Most polices also respond if the business is unable to trade because the immediate area affected by damage is cordoned off by police or other authorities.

Landlords
Property owner's policies normally have extensive coverage including fire, malicious damage, riot and theft or attempted theft. Business interruption polices covering loss of rent with similar insured risks will pay for any loss of rental income due to lease cessation clauses.

Debris removal and the cost of shoring up damaged premises is a standard extension to most property polices and insurers will usually pay for temporary boarding and weatherproofing to avoid more extensive damage.

Claims - take action now
There are strict timescales to notify riot and malicious damage claims to insurers - if a riot is declared insurers are able to recover their outlay from police authorities. Claims notification timeframes to insurers can be as short as 7 days and a report of the incident to the police is always required.

At the moment insurers are not revealing the extent of losses to the industry and loss adjusters are not being allowed onto many damaged sites which have been cordoned off as scenes of crime. It remains to be seen what the total cost to the insurance industry is and how it will react to providing continuing coverage in areas where any one insurer has an accumulation of risk and what risk management measures will be imposed to make sure cover continues.

If you are worried about your policy coverage in the event your property or business is affected please don't hesitate to contact your servicing team for further information.

View Risk Services Advice

http://www.theovalgroup.com/

Oval's View On The Current Market Turmoil

2011-08-08T09:30:00.000-07:00

As we are all too aware, stockmarkets have been going through a difficult time in recent weeks and the last week has seen a marked increase in volatility. Indeed, the FTSE100 Index fell nearly 10% last week; although the fall in the US market was more measured; with a drop of 5.7% in the Dow Jones Index. There is a sense of panic at the moment but nothing fundamental has actually changed during the last 7 days. What has changed is the sense of investor confidence which has turned very negative.

One of the downsides of modern technology and the ‘global village’ in which we now all live, is the 24 hour availability of news and updates with too much emphasis being placed on current events rather than underlying trends. Downgrading American bonds from AAA by one of the rating agencies seems rather like closing the stable door considerably after the horse has bolted and, if anything, this should perhaps have occurred back in 2008 during the banking crisis.

The US Dollar remains the World’s ‘reserve’ currency and is likely to remain so for some years yet; despite murmurings from China that we need an alternative. The American economy has been borrowing too much for years; but the Chinese have been happy to lend them the money. However, the US will remain the largest global economic power house for a long time despite the gradual balance of economic power shifting eastwards. The recent concern over the Italian and Spanish governments defaulting on their debt has been building for some time and their position has not suddenly changed over the last few days.

A common thread running through these and other worries is a lack of clear and strong leadership. Poor decisions are not welcome; but even less so is the current vacuum of decisive action both in the US and in the Eurozone. The unedifying spectacle of Democrats and Republicans squabbling over raising the US debt ceiling did not inspire confidence and visions of Nero fiddling while Rome burned came to mind – political posturing seeming to take priority over actually managing the economy. Likewise, the leaders of the various Eurozone countries kicking the future fate of the Euro into the long grass under the heading ‘too difficult’ and then all going off on holiday seemed hardly Churchillian! It is not surprising investors are spooked and hourly updates from pundits on the BBC and much hyperbole in the Press pours more oil on the flames.

This is not to say everything is sweetness and light - clearly there are major problems. However, what we feel is needed here are some deep breaths and a sense of perspective. The downgrading of US debt may indeed increase the likelihood of a double dip recession and the Euro may ultimately metamorphose into a dual currency (Germany plus two or three strong neighbours in the first tier; with the also-rans on the Mediterranean somewhat behind in a devalued poor cousin).

In the shorter term, this may well cause further falls in the markets but, we should not lose sight of the fact that many companies are actually reporting healthy profits and are sitting on substantial cash reserves. Indeed, we have seen US earnings reports for Quarter 2 exceed expectations in over 70% of cases (ref: Morgan Stanley). In addition, the recent fall in stockmarkets has left many companies on attractive valuations; based on the improved earnings and actual dividends. Currently the historic Price/Earnings Ratio is considerably below the long term average (ref Reuters); which normally indicates shares are undervalued. Furthermore, the current dividend yield on the FTSE 100 index (representing the largest UK companies) is above 3.5%; representing a substantial premium over both interest rates and Government Gilts.

In times like these, one can understand the appeal of selling investments to move into cash or buy gold. Such action can mitigate future losses and provide peace of mind. However, such action also locks in any losses to date and precludes the option of benefitting when markets recover – and they will; we just don’t know when! Let us not also forget that, for the vast majority of Oval clients, their investments are both well diversified and actively managed. A typical portfolio has eggs in many different baskets and the selected manager is continually assessing each component and asset class and then making prompt adjustments; but only where appropriate.

It is likely the leadership both in the US and the Eurozone will get their act together and make the necessary decisions; even if at times it seems just like ‘muddling through’. This may take the form of further Quantitative Easing (QE) in the US and substantial purchase of Spanish and Italian bonds by the European Central Bank to calm the markets. These are not panaceas in themselves but provide clear action and a breathing space for more lasting solutions to be agreed and implemented.

It is often said investors should ‘buy on the bullets and sell when the violins are playing’ or, in the same vein, ‘buy when there is blood on the streets’. At the moment, there seem to be quite a lot of bullets flying and the amount of red on market screens could imply a good buying opportunity. Proactive inertia could be a sensible course of action for worried investors – not because they are frozen into inactivity; but rather that a well diversified portfolio managed in line with the agreed risk profile remains a sound strategy in troubled times.

Peter Osborne
Investment Director, Oval

Integrity Is Everything In Business

2011-06-13T07:46:00.000-07:00

The other day I attended a funeral of a good friend, Damien Doran who worked for Perkins Slade Insurance Brokers, a very good broking firm in Birmingham. He was the best of our industry. A man you could always rely on to do the right thing for his clients, respected by everyone and above all a person you could trust.

We all know that unless we have trust within our industry then we might as well turn the lights off and find something else to do. It is surely our bedrock and the foundation of everything we do and say. This word trust has come up a lot in recent times in the news when they have reported the mis-selling scandal of Payment Protection Policies perpetrated by our major UK banks. Those Banks who in their adverts and marketing state that they can be trusted with our money and provide the best service on the planet.

So why, over a sustained period of time did they force people to take out these plans when they knew that they were worthless. They sold the plans to self-employed people – wrong, the wording did not allow them to make a claim. They stated that if the borrower took out the plan they would enjoy lower rates – wrong, it made no difference at all to the final rate charged. They added the premiums for the policies to the loan amount and then charged interest on the total amount and did not point this out in either meetings or in writing – just plain wrong and scandalous. It became systemic within the banking world and ended with 16million policies sold and a provision of over £6 billion to compensate customers. This was shameful and only helps continually feed peoples cynicism against the financial services industry and particularly big institutions – “they only want to rip people off” is a common statement I hear.

No doubt the banking executives took part of their bonuses based upon the profits generated by this mis-selling scandal. Will they now pay some of that back? Don’t hold your breath. When a banking executive can say that if they are forced to compensate customers for this affair then it will damage their bank you know they have lost all moral direction. They even tried to hide behind legal speak and contracts to try and delay any compensation hearing of applications and were only forced into the open by the actions of the new CEO of Lloyds who wanted to sweep away the bad smelling stuff of previous management. The other executives were then forced to follow suit or risk even more embarrassment in the press and damage to their reputation. They should hang their heads in shame.

I am a regular challenger of FSA and the intrusive nature of their regulation but their efforts under the TCF banner should be applauded. Clearly the banks do not understand what TCF means and did not have any intention of complying with the intent of the wording of the FSA guidelines. It will take some time for people to trust the banking industry and the executives who drive the decisions taken within their institutions. More open competition would help. But underneath it all is the actions of people. If leaders had the level of integrity of a Damien Doran then we would have a financial services industry that would be the envy of the World. Banker – well!!!!!

Jeff Herdman
Executive Director - Operations

Phillip Hodson the next President of Marylebone Cricket Club

2011-05-06T08:15:00.000-07:00

We are delighted to announce that our CEO Phillip Hodson, will serve as the next President of Marylebone Cricket Club.

Phillip Hodson will become only the fourth MCC President to come from Yorkshire, and the first for 50 years since Sir William Worsley served in 1961.

The announcement of his appointment was made by the current Club President, Christopher Martin-Jenkins.

Phillip has enjoyed a long and close association with MCC. He played his qualifiers for the Club in 1977, hitting a hundred in his second match, and was elected a Member in 1979. His record is enviable – he played over 300 games for MCC and represented the club on several tours, joined the Players and Fixtures sub-committee in 1987 and became chairman of that committee in 1993. He served that committee until 2000 and then moved onto the main Committee. He is a keen promoter of the need to develop and encourage young people to enter and enjoy cricket resulting in his representation on both the Cricket committee and the Youth sub-committee.

An opening batsman, Phillip Hodson won a blue for Cambridge in the strong team of 1972 that defeated Oxford at Lord's by an innings. By the time that he played in the 1973 University match he had scored a first-class century against Kent, had taken six wickets in the same match and become a regular Yorkshire 2nd XI all-rounder.

Starting out in a small business in 1977, Phillip has subsequently grown his business firstly as R P Hodson and then as Chief Executive of our Group - the largest privately owned corporate insurance brokers in the UK, now employing over 1,200 people. Our Group currently sponsors Leicestershire CCC and Durham MCC University.

Paying tribute to his successor, Christopher Martin-Jenkins said: “I believe that Phillip Hodson will become only the fourth President in a very long line to be what one might call Yorkshire through and through, and he follows three very distinguished Presidents indeed in Lord Hawke, Sir Stanley Jackson and Sir William Worsley. But for so great a cricketing county you might think only three MCC presidents a rather scant representation. Phillip is a man greatly respected by everyone who knows him and who has worked with him at MCC, and he has already been a great servant of this club. He is chairman of an insurance broking business – the Oval group – which has made no fewer than 37 acquisitions since 2005, so he combines business skill and experience with all his cricketing pedigree. It is my great pleasure to nominate him as President of MCC for 2011-12.”

We are very proud of him.

15th week of training out of 17 weeks

2011-04-01T01:32:00.000-07:00

I am now into the 15th week of training out of 17 weeks. The race is now imminent, and I am really dreading the day.

It is for a good cause; two good causes actually - NSPCC and Second Chance Brain Charity. That is the only reason I am doing it on April 17th.

Training is very hard, and my bad left leg is not getting much easier. I have run a Half Marathon on Thursday and 15 miles yesterday. So now, it is time to do less and rest. I only hope I have the stamina on the day to finish. That is my only aim. If I finish, we should have earned around £100k in sponsorship.

The Insurers and fellow Brokers have been incredibly generous; or they think that I will collapse - they are probably right.

I saw my old Rugby pals when I had just finished running 15 miles. "Hodders", they said, "You weren't built for running fast and you weren't built for running marathons"! So encouraging.

Onwards and upwards - or is it sideways?

Phillip

Difficult two weeks.

2011-02-03T01:18:00.000-08:00

Run around 20 to 25 miles each week; but then left leg is a real problem. The calf hurts all the time, and my physiotherapist says that when I tore all the muscles in September, I was expecting a lot to be running so soon at my advanced age! It really needs 6 months rest; however, I cannot go into the marathon on the back of 6 months inactivity.

So my only recipe is to try to run through the pain, with regular trips for massage and regular spell of doing 5/6 miles on the cross-trainer, which puts less direct weight on the leg.

Anyhow, I shall battle on; and, given the very generous sponsorship, I have to finish on April 17th somehow.

The good thing is that:

a) I am actually enjoying the training.
b) I have had no alcohol for 10 days – could I become a tee-total vegetarian?!
c) I am losing a few pounds each week.

If I can get the left leg right, I shall be like a 21 year old! Ho ho!!

Phillip

London Marathon

2011-01-19T04:36:00.000-08:00

Encouraged by the CEO of Allianz, Chris Hanks, I foolishly bid for a place in the London Marathon on 17th April 2011 at an NSPCC auction. More foolishly, I was the highest bidder.

It than dawned upon me that whilst NSPCC was a very worthy cause, I had to run 26 miles just before my 60th birthday.

My right knee is “shot” from years of cricket and rugby, and my left leg was completely ripped apart by a fall in France during the summer. What a stupid idea.

Anyhow, I was committed to the cause; and my determination was strengthened by the overwhelming support from my friends in the insurance industry. If you look below, you will see the commitment pledged. This is either a wonderful gesture on behalf of these Insurers or more likely a concession that the silly old b….. will collapse after 4 or 5 miles. They could well be right!

I started an agreed training programme on 23rd December. What a stupid time of year. How many gins could I cut out of the daily stipend at Christmas?

I was in South Africa over the festive period, and the training programme required 1 day run/1 day rest. This I did and by the end of the holiday – 10th January – I had built up to a very steady 12 kilometres run (8 miles) over 1 hour and 40 minutes. My knees were very painful, but my left calf was excruciating.

So back to the UK and a similar regime, complimented by sessions at the gymnasium to strengthen the left leg and regular massages from Trish (ho ho!).

There are 17 weeks of training between 23/12/10 and 17/4/11, and I am into the fourth week.

So far I have run over 100 miles, have lost weight but ache all over. It takes 2/3 days to recover from each long run, and I do worry about my left calf and achilles.

I have to get around the course in April, because I want to raise around £100k in total for NSPCC. With help from more Insurers/Brokers/Clients/Friends and Psychopaths, I hope to get to that target.

Currently, anybody observing my training would notice the similarity between my running style and a pregnant, one-legged crab – but, I am told, it can only get better.

We shall see. I shall keep you posted.

If you would like to make a donation please visit http://uk.virginmoneygiving.com/PhillipHodson

Phillip Hodson – 19th January 2011