Our Weekly Newsletter
Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.
News you can use
Coronavirus: Insurer to give £25 refunds as cars and vans sit idle
Admiral has announced a £110m refund of premiums to motor insurance customers as a result of a sharp decline in people driving during the lockdown. The company plans to return £25 per vehicle insured to customers. The move is expected to pile pressure on rivals to follow suit, with the group being the first major UK insurer to offer full refunds to all customers. Some insurers are offering to defer premiums and restructure insurance policies for those struggling to pay. The announcement comes as analysts warn that the pandemic may cause problems for motor insurers due to repair costs rising rapidly. (From BBC, 21 April 2020).
Fintech startups batten down the hatches
European fintech startups are preparing for a severe downturn to hit the sector by cutting costs, despite the hope that the pandemic’s lockdown would increase the usage of online banking. British digital lender Monzo is furloughing some of its staff and recently closed one of its customer service offices, while their rival Revolut is offering to pay staff in shares rather than cash. Similar moves have been made by Germany’s biggest digital banking start-up N26, including reducing its advertising spend, furloughing a tenth of its staff and adjusting the timeline of its intended launch in Brazil. (From Financial Times, 21 April 2020)
Companies House suspends strike-offs
Companies House has halted its strike off process to avoid companies being compulsory dissolved during the coronavirus crisis. The measure is designed to help businesses avoid being struck off the register as they struggle to cope with the financial impact caused by the pandemic. Suspending the power will give companies more time to update their records in order to accurately document the effects the Covid-19 crisis has had on their business. The announcement follows Companies House approving a two-month extension for all registered companies to file accounts in late March. (From FT Adviser, 20 April 2020)
Estate agents offer “virtual viewings” during lockdown
The housing market, which started off its best year since 2016, quickly crumbled following the lockdown announcement in March. Rightmove claims that leading up to March 23, the number of house sales was up 11% since the beginning of the year, compared to the same time in 2019. Once the lockdown was announced, Rightmove’s website visits fell by 40%. Despite this, Ben Hudson, managing director of Hudson Moody, says its launch of ‘virtual viewings’ has been met with enthusiasm among prospective buyers, with most sellers already on the market intending to progress with sales once the lockdown is lifted. (From The Daily Express, 20 April, 2020)
People in lockdown are playing video games and shopping online
Starling’s user data reveals that average customer spending has increased across the UK, with the figure more than doubling in London. Starling’s user data shows that customers are listening to the government’s advice to stay at home, showing a significant decrease in spending on transport, while customers’ weekly spend on PlayStation and Nintendo increased by a 300% between 15 March up until 5 April. Overall, user data revealed dramatic rises in average transaction values, with London seeing the highest spike in average spending from £53.57 on the week ending 22 March 2020 to £107.72 the following week. (From AltFi, 20 April 2020)