HIGHLIGHTS

• Powerhouse Energy Group development partner - Hydrogen Utopia International, inked a five-year framework agreement for DMG® hydrogen-from-waste technology with Linde Engineering.
• Powerhouse Energy recorded revenue of £373,306 for the six months period ended 30 June 2021 compared to £100,000 in 2020.

The shares of Powerhouse Energy Group Plc (LON: PHE) soared after the company’s development partner - Hydrogen Utopia International, inked a framework agreement with Linde Engineering.

Powerhouse Energy Group Plc’s shares are trading at GBX 6.05, up by 37.50% at 10:47 AM BST on Friday, 12 November 2021. The market capitalisation of the company stands at £173.82 million, and the shares of the company returned 128.87% to shareholders in the last one year.

Exclusivity agreement with Linde

Powerhouse Energy Group’s development partner - Hydrogen Utopia International Plc (HUI), inked a five-year framework agreement with Linde Engineering. The deal provides Linde Engineering with the license for HUI’s deployment of Powerhouse Energy’s DMG® technology in Hungary, Greece and Poland. HUI holds exclusivity for the promotion and marketing of DMG® technology in these countries. The deal also enables Linde Engineering to engage in any individual projects, from equipment supply, designing and building, and full EPC subject to Chemical Thermal Conversion Chamber supply approval in select European locations.

Linde Engineering also concluded a technical feasibility evaluation to install the syngas clean-up and hydrogen extraction of the DMG® technology at an upcoming facility located in Konin, Poland. Post completion, the project is expected to contain ten DMG® units in a single site. The completion of the project is dependent on the funding approval from the Just Transition Fund of the European Union, which will be matched by funds from the Government of Poland.

Earlier on 7 October 2021, Powerhouse Energy entered into a collaboration agreement with HU2021 International UK Limited, Hydrogen Utopia International Plc’s wholly-owned subsidiary, to market the DMG® technology outside the UK.

Powerhouse Energy Group Plc’s financial performance

Powerhouse Energy Group is a UK-based technology firm engaged in the commercialisation of hydrogen production from waste plastic. Powerhouse Energy recorded revenue of £373,306 for the six months period ended 30 June 2021 compared to £100,000 in 2020. Its gross profit rose to £16,776 during the period compared to £132 in H1 2020.

Bottomline

The HUI and Linde Engineering partnership for the deployment of Powerhouse Energy’s technology is aimed at aiding quicker clean-energy transition across Europe, as the technology uses plastic waste for green hydrogen production.

What is online physiotherapy?

Online physiotherapy, also known as Telehealth physiotherapy, is a digital alternative to in-person appointments for physiotherapy. Individuals can get their condition diagnosed and treated by a completely qualified physiotherapist via a video call, rather than in person.

Online physiotherapy consultation service uses the video meeting technology for conducting a video-based consultation between a patient and a physiotherapist.

For consultation, one can use a smartphone, tablet, laptop, or a desktop computer having a camera, microphone and earphones, speakers, or headset.

This is convenient for people who live in rural areas, find it difficult to travel, or don't have the time to stuck in traffic jams on their way to a physio appointment.

Besides, an increasing number of clinical studies have demonstrated that telehealth/online physiotherapy consultations are safe, secure, cost-effective, as well as in the vast majority of cases, as effective as in-room consultations.

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Benefits of Online Physiotherapy Treatment

Physiotherapy has over the years proved its effectiveness in helping patients restore their health along with enhancing their physical strength, function, and mobility. With online physiotherapy, a person can address backaches, joint pains, and old injuries (if any) that were not considered due to work and life commitments.

Some of the benefits of online physiotherapy include:

• Enables convenience and provides personalised care.
• Brings about a faster healing process without any mobility issues.
• Better time management.
• Cost-effective.
• Family support and supervision.

Physiotherapy Insurance

Medicare is the universal health insurance scheme in Australia. It makes sure all Australians get an access to a variety of services (health and hospital) at low or no cost.

However, Medicare will only cover the physiotherapy costs that incur as an inpatient in a public hospital. Whenever a person takes extras with health insurance, he can obtain benefits towards the cost of physiotherapy. In some health insurance coverage, cover for physiotherapy comes under extras and can offer benefits during the visit to a physiotherapist.

ALSO READ: Physiotherapy Cover: What does it Include?

©Kalkine Group 2021

To know more about extras and how to find the best cover that suits you? CLICK HERE

There are some private health insurance service providers who give cover for physiotherapy under extras policies; though, the benefits given will always depend on the opted health insurance extras plan. For example, a basic extras policy may provide some limited benefits.

If included, an extras policy will cover the below-mentioned physiotherapy services-

ALSO READ: 6 Important checklist items to consider while buying health insurance plans

Let us now get you acquainted with the online physiotherapy service providers across Australia-

Few Selected Available online physiotherapy services in Australia

* Prices may vary with time.

With health insurance, one can minimise the financial impact of such a situation, as health exigencies can happen any time. As everyone has specific health requirements, there is no one-size-fits-all plan that would suit everyone in the best possible way.

Private health insurance

Private health insurance policies cover for the healthcare cost. It has two segments-

• Hospital cover- Compensates specific treatments you receive in a private hospital, including hernia operations, joint reconstructions, among others.
• Extras cover- This is for out-of-hospital healthcare, like dental, optical, and physiotherapy.

Before going for any healthcare plan, you must remember that not all private health insurance plans have the same features. Some policies will cover only a few treatments, while others might cover several. Therefore, it is prudent to compare policies to make sure you are getting the plan as per your requirements, and a good value for your money.

In Australia, private hospital cover is available in four different tiers - Basic, Bronze, Silver, and Gold. You can get a more comprehensive cover as you move through the different tiers, albeit at a higher premium.

However, this does not imply that all Gold policies will be the same. Features in Gold category vary across different policies, so it is advisable to compare before you choose any plan.

DO READ: Public vs Private Health Insurance in Australia

Key benefits of private health insurance

Who are the top health insurance providers in Australia and what do they offer?

The table below covers Kalkine’s top picks and includes most of the top-ranked policies. The table consists of the hospital and extra cover provided by the health insurance companies.

The prices mentioned are for the mid-level hospital cover (Silver tier) of a single member with a taxable income of A$90,000 or less in the financial year ending 30 June 2021, including A$500 excess in Sydney. The packages below can provide you with even greater peace of mind.

Which are the Best health funds in Australia? How do they help you?

Every individual has his specific requirements. Therefore, there is no health insurance policy which is ideal for everyone. Some funds focus on particular areas, others on profit only, while some are for specific groups. There are a few things you must keep in mind before going for a private health insurance policy. Some of the prominent factors are waiting time, claim process, and age criteria.

Waiting time: A health insurance plan often applies waiting time on specific procedures. This means that if you purchase a policy today, you might not be able to get a claim for a particular treatment till months, or even years later. Hence, it is recommended that before buying any health insurance plan, you must always check for the waiting period clause.

Out of pocket costs: Out of pocket costs are also known as gap or patient payments. Health insurance does not always cover all the costs associated with an illness or injury; you might also have to pay out of pocket costs for medical services. Outside of a hospital, these costs could relate to services such as diagnostic tests or appointments.

Check for Co-payment or Co-pay Clause: In a health insurance policy, co-payment clause is the percentage of the claim for the treatment that you must bear from your pocket. However, the remaining amount will be paid by the health insurance provider.

Claim process: One must check all the things mentioned in the policy and go through the claim process that the insurance provider is following. At the time of settling health claims, a smooth process is a boon.

The Age Criteria: Age is an important factor when it comes to buying a health insurance plan. While purchasing a health insurance policy, you should keep in mind the age of the family members who need to be covered.

READ MORE: 5 Things to Consider While Going for Private Health Insurance

Looking for a family cover? Here are some pointers to consider

                Image: ©Kalkine Group 2020

You can choose health insurance which matches the requirements your family - whether you are just in the planning stage or you have already got children. You should check some key features which might be particularly helpful:

• If you are planning to start a family soon, it might be worth investing in a policy which offers you to get money back for both pregnancy and maternal health cover.
• If you have children, search for a child-friendly health insurance plan by considering policies that provide cover for your kids at little or no extra cost.
• Most health insurance policies cover dependent children up to 18 years, but if you think your kid would benefit from the support for a little longer, you can pick a health insurance plan which gives you an option to extend that age limit.

When you are finalising an ideal health insurance plan, it is also essential to select a health insurance provider wisely. Features like hospitalisation, inclusion of illnesses, and the critical condition, have important roles to play. Hence, you must be sure that the insurance provider you are choosing offers the desired services.

Many health funds offer unique benefits for children. Below mentioned are some features to look at before buying an insurance plan for kids -

• No excess/co-payments for children: These funds do not charge an excess or co-payment for children who need to go to the hospital on some or all their family and single-parent policies.
• Extended coverage for dependent children: Most funds let you keep your children on your policy until they are 25 years old, or if they are a full-time student, unmarried and live with you, or in a de-facto relationship.
• Discounted extras services: Some health insurance plans offer free or discounted extras services for children, like dental check-ups or rebates on glasses. To avail these benefits, you are required to visit the preferred providers.

DO READ: Why is family health insurance important?

What does best-suited health insurance mean for you?

You may require a health insurance plan which caters to your specific needs. The best health insurance plan is necessary for the below-mentioned reasons -

• Limiting tax: Some people in Australia buy health insurance to avoid levy charges. Medicare Levy Surcharge (MLS) is an additional charge paid by Australians who do not buy a private insurance policy.
• Planning to start a family: If you are thinking to start a family, then purchasing a private health insurance policy is probably a priority for you.
• Need for Extras: Don't need a policy with cover for the hospital, but still wants to claim benefits like dental and optical. Finding the best extras policy is all about working out what you want to get covered under it and making sure you are getting the most out of your policy.
• Getting older: As you get older, your situation changes, and it is important to find a health insurance policy which suits your new requirements in the best possible way. For having a safe and sound retirement, many residents in Australia ponder private health insurance policies.
• To avail age-based Discount: Age-based discounting is initiated by the federal government to encourage people to purchase a private hospital cover earlier in life. This suggests, if you are under 30 and take any private hospital cover, you may be eligible to get a discount.
  • Last year, the Australian government had given an option to health insurance providers to offer discounts of up to 10% to individuals in the age bracket of 18-29 years.

DO READ: How does age impact the cost of health insurance plans?

Why go for extras coverage?

Extras, or extras cover, is a particular private insurance plan which involves non-hospital procedures and treatments. The most popular extras cover dental, optical, and physiotherapy treatments.

Moreover, emergency ambulance transport cover, some psychology consultations, can also fall under extras. These are some crucial factors to consider when choosing the right extras cover for you.

Private health insurance providers offer extras cover as an extension to the hospital cover, significantly decreasing out-of-pocket expenses for prescription of eyeglasses or fixing gums and teeth.

Sometimes the extras can be referred to as an ancillary cover or the general treatment.

To Know More, Read: What are extras and How to find the best cover that suits you?

Tax Benefits and Private Health Insurance Rebate

Many residents in Australia need to pay a specific amount for public health insurance as taxes. However, Medicare Levy Surcharge (MLS) affects those who earn more than average.

MLS is an additional charge paid by Australians who did not buy a private insurance policy before they turn 31 but earn more than a specific amount. The Australian government initiated this approach of extra tax as a measure to reduce the pressure that public insurance can face.

The government offers the private health insurance rebate. The private health insurance rebate provides a saving on the cost of private health cover funded by the Federal government. The level of rebate you could receive is based on the age of the oldest person on the policy and your taxable income (or combined family income for couples and families).

The table below represents the average amount of costs covered by different funds-

Summary

• Besides the illustrated public healthcare system, the Australian government has set up various public health initiatives with an objective of bettering people’s health.
• Numerous health initiatives are currently in progress in Australia.
• While some of them are not successful, there are a few health initiatives which have garnered huge response and provided positive results.

Australia’s healthcare system is one of the most comprehensive ones across the world, offering a wide assortment of services. Right from general and preventive health, to the treatment of more complicated and serious conditions, the Australian government cares for every health-related issue.

Besides the illustrated public healthcare system, the Australian government has set up various public health initiatives to improve people’s health.

There are numerous health initiatives currently running in Australia that address a wide range of health issues, from public health research initiatives to mental health campaigns.

What is a health initiative?

A public health initiative can be explained as a programme or scheme that provides support for specific health issues prevailing in a community. They also include research initiatives aimed at informing and educating the people on a particular health issue.

Also read: What is trauma insurance? What does it cover?

A few health initiatives running in Australia

At present, so many people are going through massive mental, emotional, physiological and financial turmoil that the government had to step up and swing into action to curb the rising health predicaments. Consequently, there are a plethora of health-related programs currently in progress in the country.

Catering to the issues pertaining to mental health

• The Million Minds Mental Health Research Mission is a programme that helps more than a million Australians suffering from mental health problems access new approaches to deterrence, identification, medication and then healing.
• KidsMatter is another initiative that assists in promoting mental health and early interference for all children via universal primary and early childhood programmes.

Special Health programmes for women

• The National Women’s Health Strategy:2020-2030 is a recent one which aims to enhance the health and welfare of all women and girls in Australia.
• The Maternity Services and Stillbirth Prevention is another Australian government programme that talks about efforts to enhance care and outcomes in the states.
• The national perinatal Depression Initiative seeks to improve prevention and early detection of antenatal and postnatal depression. Also, it provides help to new mothers experiencing depression or even depressive thoughts.

Do read: Everything you should know about cheap health insurance

Initiatives for Aboriginal and Torres Strait Islander

• A programme called Close the Gap campaign has been started to close the health and life expectancy gap between Aboriginal and Torres Strait Islander people and non-indigenous Australians within a generation.
• The Youth Employment Programme is a plan for young Aboriginal and Torres Strait Islander students to aid them into employment or higher studies after completion of high school.

Health initiatives for drugs, alcohol, and tobacco

• The FASD Action Plan proposes to research and teach about Fetal Alcohol Spectrum Disorders resulting from drinking during pregnancy.
• The Good Sports Programme provides funding for plans aimed at changing mindsets about alcohol through associations with sporting clubs.
• Needle and syringe programmes (NSPs) aim to augment education, counselling and referral services and the accessibility of NSPs through pharmacies and other outlets.
• Pregnant Pause initiative is a financed programme that urges people to go alcohol-free during pregnancy.

Must read: How sound is Australia’s mental health insurance system?

Some successful initiatives in Australia

• Neural tube defects: Research shows that in the last ten years, public health initiatives have helped a lot in reducing the occurrence of neural tube defects in Australia. Neural tube defects are serious birth defects, with high mortality and lifelong morbidity. The National Health and Medical Research Council urged the women to increase folate consumption periconceptionally which helped protect babies against neural tube defects.
• Immunisation and disease elimination: In past two decades, the country has launched a number of national immunisation campaigns such as the National Measles Control Campaign of 1998 and the Meningococcal C campaign of 2003-2004 to reduce and safeguard Australians.
• Lifetime health cover initiative: (LHC) is a government run programme that commenced in 2000. It was created to motivate people to get hospital insurance earlier in life. Also, the government enforced that the later one gets a policy, the higher premiums are.
• Cervical cancer: The National Cervical Screening Programme (NCSP) supports the pap smear for women between age 18 and 69 or two years after one becomes sexually active. The test was introduced in 1991 and is known for identifying pre-cancerous cells. Interestingly, by 2002 it had reduced the incidence of the disease by half.

The importance of initiatives in Australia

While not all the government initiatives have profitable results, initiatives pertaining to just health are significant. These programmes help health professionals and the government in learning more about what exactly is needed to address the specific issues. Health programmes can:

• Find treatments and vaccinations for diseases and illnesses, also featuring immunisation campaigns.
• In order to enhance the health and welfare of all Australians.
• Ease up the pressure on the public healthcare system by improving the health of Australians.
• Teach and notify people about disease inhibition and promote better health and lifestyle choices.
• Tackle issues in the public healthcare system which do not provide adequate support.

Summary

• A family health insurance policy not only gives you peace of mind about your family’s wellbeing but can also help you save money for your children’s future.
• You must look at various plans and look for the best deal in a family health insurance plan to minimise your out-of-pocket expenses.
• If you are planning to have kids, you should choose a health insurance plan that offers pregnancy cover.

In Australia, Medicare covers most of the healthcare related-needs. However, there are some exceptions, such as dental care, glasses and contacts, physiotherapy, and ambulance services. These services, if availed, can create a deep hole in your pocket.

Family health insurance is an investment that is imperative as it protects you and your family and simultaneously helps save on costs. A family plan acts as an assurance that your loved ones are covered for most medical procedures.

The government of Australia introduced reforms to make private health insurance simpler and help people to select the health insurance plan that best fits as per their requirements. Now, the private health insurance providers are required to classify their private hospital cover into four tiers: Gold, Silver, Bronze or Basic.

GOOD READ: Australian Health Insurance Got Expensive in October; How can you save?

In this article, we will discuss why is it essential to opt for family health insurance and what factors to consider while finalising one.

Reasons to consider family health insurance

Whether you are interested in hospital cover or extras cover or both there are countless reasons to choose a family health insurance. As highlighted above, a family plan gives you peace of mind and helps save money that can be invested in the future of your children.

This is because a health insurance plan can function as a safety net for those unforeseen expenses from chronic disease, dental care, or hospital treatment. If you are planning to have a kid for the first time or extending your family, then a family health insurance that covers pregnancy and birth care is worth considering.

ALSO READ: Australian Health Insurance Got Expensive in October; How can you save?

Health insurance for kids

Many health funds offer unique benefits for children. Here are the few features to look at if you are buying an insurance plan for kids-

• No excess/co-payments for children: These funds do not charge an excess or co-payment for children who need to go to the hospital on some or all of their family and single-parent policies.
• Extended coverage for dependent children: Most funds let you keep your children on your policy until the age of 25 if they are a full-time student, or if they are not married and live with you or in a de-facto relationship.
• Discounted extras services: Some health insurance plan offer free or discounted extras services for children, like dental check-ups or rebates on glasses. You will be required to visit preferred providers to avail these benefits.

Choose your insurance provider wisely

When you are finalising an optimal health insurance plan, it is also essential to choose a health insurance provider wisely. Features such as hospitalisation, the inclusion of illnesses, and critical disease play a significant role. Hence, you must be sure that the company you are opting for offers the desired services.

If you are planning for kids, then you should choose a health insurance plan that offers both pregnancy and maternal health cover.

If a person has confusion in choosing a health insurance plan according to the requirements, it is advisable to consult a health insurance planner. Insurance planners help in getting the right health insurance cover according to your needs at the right price.

READ MORE: How do Financial Planners Pick the Best Health Insurance for You?

Look for better deals on your family health cover

An individual can go to any lengths to protect the health of his/her family, but that should not comprise paying extra for health insurance. You deserve a better deal for your family health cover which means reducing out-of-pocket expenses when you are already paying large monthly premiums.

Paying a lot on your policy and getting low returns in rebates from your insurer can be annoying. This highlights the need for comparing several health insurance policies.

Compare and check how much you can save

We are living in a time when buying a health insurance policy has become imperative, and when it comes to the wellbeing of the family, the expenses take a back seat. But before buying any health insurance plan you should check what all cover your insurer is providing. There could be a possibility that some other health insurance plan offers extra benefits at the same price.

Therefore, it is recommended that before buying any family health insurance plan, you must compare two or more plans to know what the other players are offering. There are freely available sites where one can easily compare health insurance plans to select the optimal plan.

Bottomline

If you have purchased a health insurance plan, it is not necessary to stick with that policy forever. You can reassess the plan and switch to other policies according to your need. One of the best things about a private family health insurance plan is that your dependents and children are usually covered under your couple plan without any extra cost!

Summary

• Australian hybrid healthcare system is quite complex, and it can be overwhelming to inspect all key elements that come with it.
• Both Medicare and private insurance have their perks, but also disadvantages that every Australians need to consider.
• After reading the complete guide that includes the most significant pros and cons, one should be able to decide what option is the best for him/her.

Sticking to your public insurance or getting a new private health policy with a range of benefits is one of the most critical doubts Australians have before they turn 31.

When the government introduced the Lifetime Health Cover (LHC), more youngsters decided to join the private insurance world to avoid paying higher tax rates. Due to LHC, all residents aged 31 and younger would need to pay two per cent additional tax if they did not have a private insurance policy.

For that reason, some people have opted for private insurance as it seems more affordable with fewer losses. Basic policies are the first choice for those in a similar situation, but some genuinely want to be more secured and opt for better coverage.

However, both public and private insurance have their advantages and disadvantages. In this article, we would focus on the Australian public and private insurance and their respective pros and cons.

RELATED: What are the different types of health insurance available in Australia?

        Image Source: © Kalkine Group 2020

Public healthcare in Australia

Public healthcare in Australia is mostly referred to as Medicare.  During the initial years, Medicare had another name, Medibank, when it was started back in 1975 by the Whitlam government. The system has experienced numerous changes since its start date, mostly due to political reasons and governments increasing/decreasing the levy over the years.

Today, Medicare is in place and allows most Australian residents to enjoy the perks of an affordable or free-of-charge healthcare system. The system offers additional benefits to people who served in a war as veterans and those who are not in a good financial situation.

When going to a hospital as a private patient, Medicare covers most hospital services apart from accommodation and ambulance service. If individuals want to get those benefits covered, they will need to sign up for a private insurance company for low or no out-of-pocket costs.

DO READ: What is an ambulance cover, and is it for you?

Advantages of public healthcare

            Free or low-cost treatments

All treatments and services listed on the Medicare Benefits Scheme (MBS) are entirely covered by public healthcare. That means consultations with the GP, specialists’ treatments (blood tests, scans, and others), necessary surgical operations, vision tests performed by optometrists, some dental surgeries, and medications listed on the Pharmaceutical Benefits Scheme (PBS) are free or almost free of charge.

The younger generation does not necessarily need private insurance as Medicare covers most of the procedures. Bulk billed GP ambulances do not require any payment from the patient but directly bill the government. Australia is lucky enough to have such a system, as healthcare costs can reach thousands of dollars without any healthcare cover.

ALSO READ: How does health insurance work?

            Many opportunities to save money

Let us say that the average person does not require constant medical attention and has no pre-existing diseases. If that person is eligible for Medicare, there will be no monthly costs for healthcare, saving thousands of dollars annually.

Elective surgeries are still available, but patients will need to wait a few months to get them. In conclusion, if there is scope to wait in queues, Medicare is a good enough option for spending less money.

            Most conditions are already covered

Medicare already covers around 75 per cent of the most common illnesses. Everything that an average Australian need is included in MBS so there should be no worry when visiting a doctor for common cold, getting pathology tests, or just having a standard consultation with the family doctor.

            Equally qualified staff at public hospitals

No matter what hospital one goes to, one will be surrounded by fully qualified doctors. Every doctor working in a public hospital needs to go to the same school that private hospital doctors attended. Same goes with nurses and other hospital staff.

However, some people would still prefer going to private hospitals because they have a feeling that money brings better service. This is not entirely true and should not be a factor while opting for private healthcare.

Moreover, public hospitals may be better equipped than private ones, especially when it comes to emergency cases. Private patients would, most likely, still be admitted to a public hospital when holding private insurance in case they call 000.

INTERESTING READ: Do seniors need private health insurance, or is Medicare enough?

Disadvantages of public healthcare

            Long waiting queues

Apart from emergency surgeries that need to be done straight away (e.g. car accidents), all elective operations are subject to waiting, sometimes for months. When patients have life-threatening diseases such as cancer, time is the most significant factor.

Unfortunately, Medicare does not work like that and requires people to wait till their turn comes. As this disadvantage is a big one, a better solution would be to hold private insurance at the same time in case of similar risk.

            Rare diseases and some treatments are not covered

Patients that do not hold private healthcare insurance and want to see a dentist will need to pay significant out-of-pocket expenses. Medicare does not cover for most dental treatments or palliative care (e.g. physiotherapy, acupuncture, and others).

In the case of rare diseases, the patients would be luckier if they have a private insurance policy.

            No choice for particular doctors

When patients are being treated in public hospitals, they cannot choose their specialist. On the contrary, they will get a specialist who is available at that moment.

As this element is rarely considered an issue, it might be difficult for some people that have already put trust in a particular doctor. A known face can sometimes do wonders in the recovery process and treatment.            

            Possible additional expenses

As mentioned earlier, Medicare Levy Surcharge (MLS) affects people that do not get private insurance by the age of 31. If the levy comes in effect, one will need to pay higher taxes for quite some time. In case they decide to sign up for a private insurance policy, they will need to pay up to 70 per cent higher insurance premiums, depending at what age they joined.

RELATED: What factors can impact your health insurance premiums?

Private healthcare in Australia

When the Australian government decided to privatise part of the healthcare system, a hybrid system got created. Since then, Australians have opted for private insurance in cases where Medicare was not applicable.

Today, 38 private healthcare insurance companies offer a range of services for their clients. With MLS in place, more people were forced to get private insurance as it proved to be cost-effective. However, private insurance is not a bad option to consider, as it offers many attractive benefits.

Advantages of private healthcare

            Limited or no queues

Okay, maybe some. But nothing compared to those in public healthcare when waiting for elective surgery.

Depending on the procedure type, it might take a few days or a few weeks maximum to get under the surgeon’s table. In rare cases (mostly for procedures that are not as common), patients can choose when they want to be admitted to the hospital.

            More privacy

Private healthcare insurance holders can stay in a private room while being treated in a hospital. Medicare does not cover for private rooms, only shared or semi-shared hospital spaces.

Patients in private hospitals can usually choose which room they want if it is available. Having a private room after a tough procedure does sound like a more pleasant scenario compared to the shared room with five other strangers.

            Selecting doctors and specialists

Compared to public healthcare, private healthcare holders can enjoy the option of choosing their own doctor. However, the desired doctor might not be available at the time of surgery so patients would still need to be happy with whatever doctor they get.

Apart from this choice, people can get more claimed treatments, such as dental procedures, eyeglasses and prescription sunglasses, heart surgeries, joint replacements, and others.

            38 companies to choose from

Australia has 38 private insurers, each being different in the services they offer and the cost of these services. Individuals can pay for the desired number of extras and services they need, so it is unlikely that the money will go to waste.

The insurers also offer different levels of insurance. Starting with Basic and moving to Gold, everyone can find whatever suits their needs and reasons for joining.

DO READ: What are the top healthcare insurance providers in Australia?

Disadvantages of private healthcare

            It can get more expensive every year

Private healthcare insurance companies are infamous for raising premiums every year. That happens because hospital costs are prone to change, and these companies just try to make some profit themselves.

However, the industry is immensely competitive, so insurers need to be cautious about expenses they ask for. It is human nature to opt for something more affordable. Therefore, most insurance policies do not differ that much in price.

In conclusion, patients can have a policy which is affordable one year but can be considerably expensive in the next.

            It is already quite pricey

For a good health insurance policy, people need to pay a lot of money annually. Some gold policies can cost up to A$200 weekly, which includes most benefits one private healthcare insurance company can offer.

That said, Australians were seen to get Bronze Plus insurance the most. ‘Plus’ editions usually provide at least one more medical department that the insurer will cover for.

            High complexity

Private health insurance is not easy to understand. Multiple companies offering different products can be both advantageous and disadvantageous, as people may find all those rules and conditions confusing.

The insurers are also often getting sued for misleading content and marketing. For example, they would tempt people to join them for a few weeks for free but would have tons of conditions that applied to the promotion.

            Waiting periods are still a thing

No matter how high or comprehensive the policy is, Australians still need to respect a company’s waiting periods. Those with pre-existing diseases need to wait up to 12 months, which could be a problem if they require urgent treatment for the illness.

Some waiting periods are short, like physiotherapy or vision services (mostly for two months), but people still need to wait. It could be frustrating to wait for, especially after paying hundreds of dollars towards the company, which does not even cover for any claims in the beginning.

ALSO READ: Latest Development in the Health Insurance Space; Flick Through Bupa, HBF Health and HCF

Summary

• The Toronto Stock Exchange Venture has traditionally housed some great Return on Equity (ROE) stocks.
• GreenPower Motor (TSXV: GPV), Olivut Resources (TSXV: OLV), and Decklar Resources (TSXV: DKL) are three stocks that have emerged as the top RoE performers across the TSX and the TSXV this year.
• ROE is a key metric to analyse stock performance and profitability.

The coronavirus pandemic has upended the equity markets, forcing top stocks to take a backseat and thrusting forward a new crop of performers. In the hullabaloo that followed the March pandemic-led market crash, precious metals (gold) and technology stocks grabbed the centerstage, emerging as investors’ favourites. Traders also sought out high Return on Equity (ROE) stocks, a key metric to analyse stock performance and profitability. The Toronto Stock Exchange Venture (TSXV), the breeding ground for young, upcoming and small companies, has traditionally housed some great RoE stocks. Lately, GreenPower Motor (TSXV: GPV), Olivut Resources (TSXV: OLV), and Decklar Resources (TSXV: DKL) are three stocks that have emerged as the top RoE performers across the Toronto Stock Exchange (TSX) and the TSXV over the past 52 weeks.

Before taking a detailed look at these three stocks, let us understand what is Return on Equity (ROE). The RoE of a stock is recognized as the return on net assets, and helps investors understand the income generated by a business relative to shareholders’ equity.

Let us a take a detailed look at the three leading RoE stocks:

Decklar Resources Inc. (TSXV: DKL)

DKL Current Stock Price: C$ 0.31

Sector: Energy

Industry: Oil & Gas

Decklar Resources RoE (Trailing Twelve Months or TTM) stands at 31,343.1 per cent, as per data on the TSX site. The C$ 16 million-company has a price-to-book ratio of 31 and price-to-cash flow ratio of 160.70.

Decklar Resources, earlier known as Asian Mineral Resources, is an oil and minerals development company exploring in the West African region. The company recently acquired Nigerian-based Decklar Petroleum Limited, which has interests in the stacked sands reservoir, Oza Field. Its sole asset is the Risk Service Agreement (RSA) with Millenium Oil and Gas Company Limited on the Oza Field. A new central production facility with 15,000 boe/dcapacity is also in the pipeline.

Earlier this month, the company announced 2.825 million share options to certain organisation directors and officers, at a price of C$ 0.28 per share for a period of five years (expiring September 3, 2025). In August, the company announced a preliminary funding of US$ 26 million to develop and restart of production at its Oza Oil Field in Nigeria.

Decklar also operates the Holt Property on Vancouver Island, British Colombia. Its shares are down 400+ per cent YTD. However, in the last three months, the scrips have gained 100 per cent.

Olivut Resources Ltd. (TSXV: OLV)

OLV Current Stock Price: C$ 0.05

Sector: Basic Materials

Industry: Metals & Mining

Olivut Resources’ RoE (TTM) is an eye-popping 28,771.57 per cent, as per data on TSX. Shares of this Canadian diamond and precious mineral exploration company are down nearly 17 per cent YTD. Following the pandemic-led market crash, Olivut shares have grown by 25 per cent in the last six months. The stocks surged by nearly 67 per cent in the last three months, indicating a momentum in its relative price performance.

The C$ 2.8 million-mining company is exploring HOAM Project in the Interior Plains region of Northwest Territories in Canada. In July, Olivut Resources announced a 50-50 partnership with Talmora Diamond Inc over earnings from the Seahorse Project. In a statement providing update, Olivut said that it has concluded planned drill program’s field portion on the Seahorse Project.

The company’s drilling work was halted due to the current COVID-19 pandemic, which reflected in its latest quarter report.

In its third quarter financial report (ending July 31, 2020), the company’s net loss narrowed to C$ 84,998 from C$ 0.27 million in the same quarter last year. The company ended the quarter with cash balance of $100,911 and accrued liabilities of $1 million.

The company is looking at additional financing sources, since “low level of investor interest for equity financing” currently exists for junior exploration companies, it said in a statement.

GreenPower Motor Company Inc. (TSXV: GPV)

GPV current stock price: C$ 18.54

Sector: Consumer Cyclical

Industry: Vehicles & Parts

Shares of heavy-duty electric-vehicle manufacturer GreenPower Motor escaped the scratch of the coronavirus pandemic, surging over 845 per cent year-to-date (YTD). In the last three months, the stock advanced by a massive 488 per cent. The scrips increased by 89 per cent in the last one month.

GreenPower Motor concentrates on the North American markets, with a special focus on electric buses. GreenPower produces and distributes high-floor and low-floor vehicles, including transit and school buses, double-deckers, shuttles, and cargo vans. Its flagship product is called EV Star.

As per data on the TSX site, GreenPower Motor’s has the third highest return on equity across the TSX and the TSXV. Its RoE (TTM) is a whopping 28,302.26 per cent. The 30-day average trading volume for GPV stock is 0.24 million. The company is currently valued at C$ 346 million.

It completed the delivery of 68 buses, generating $13.5 million revenue with a gross profit of $4 million in the year ending March 21, 2020.

For its first quarter fiscal year 2021 (ending ended June 30, 2020), the company revenue touched US$ 2.27 million and generated a gross profit of US$ 0.618 million. It ended the quarter with US$ 0.31 cash and restricted cash balance stood and US$ 0.7 working capital.

GreenPower Motor reported insider purchases of 300,000 shares in the past one year (as of September 2020).

The EV manufacturer announced US initial public offering (IPO), at a price of US$ 20.00 per share, to raise gross proceeds of US$ 37.2 million on September 1. The stocks are trading on the Nasdaq under the symbol “GP.” The net proceeds will be used to fund production of all-electric vehicles.

Summary

• The Canadian insurance industry is overwhelmed with rising claims and volumes amid the pandemic
• Business continuity, liquidity and insolvency have emerged as key threats to the sector
• Relaxing regulatory requirements, deferring tax collection and federal support is the need of the hour

The Canadian insurance sector was broadly well-positioned at the end of 2019, some forecasting a CAGR 4.1 percent growth between 2020 and 2024. And then the world turned upside down.

The entire insurance sector plunged into the COVID-19 morass and the strict containment measures enforced to curb its spread. GlobalData’s revised projections slashed the industry’s growth to CAGR of 1.7 percent, down from 4.1 percent before the pandemic.

How do you deal with a public health emergency of such magnitude, insiders in insurance industry asked each other as the impacts of the pandemic slowly began to unfold by mid-March.

Challenges Faced by Insurance Sector in COVID-19

Thrust abruptly in the stark coronavirus pandemic, the Canadian insurance sector faces three-edged challenge in the form of rising claims, business continuity, and eroding capital reserves.

1. Rising Claims & Policy Support

As anticipated, life and health insurance claims have shot up with the pandemic. Canadians seem to have suddenly woken up to the need of life and health policy, some even buying expensive and high-premium insurance to safeguard their families.

To support life and health policyholders on claims and coverage during COVID-19, many insurers have granted grace periods on premiums and extended eligibility and coverage period. Some are also relaxing their underwriting requirements, reports Deloitte Canada, to expedite and encourage new policy issuance.

However, the impact on non-life insurance segments have somewhat been unpredictable.

Canada may boast of top-notch universal healthcare system, but it is mostly private non-life insurers who pay for prescription drugs, ambulance services and other costs not covered by the public system.

Then there are insurance segments for business interruption, liability and travel that are facing the brunt of the financial and operational strain due to increased claims. Though most have standard exclusion for pandemics and related risks, companies are gearing up to pay.

Meeting claims are becoming a costly affair, given the scale of economic disruption says the World Bank in its COVID-19 Notes Financial Series. And as a result, insurers face short- and medium-term impacts, it adds.

COVID Impact on Insurance Sector

(Source: COVID-19 Outbreak: Insurance Implications and Response report, World Bank)

In Canada, insurance firms are regulated at federal and provincial governments. Despite the economic implications, no industry-specific stimulus or measures have been doled out by the governments.

Meanwhile, several media reports indicate that Canadian business policyholders have begun slapping class action lawsuits on insurers for their refusal to pay pandemic-related income claims.

2. Business Continuity

As employees shifted en masse to remote working processes, insurance organizations rushed to enable their staff with digital tool kits, learning and management system (LMS), cybersecurity to maintain business continuity.

Several life and health insurance firms reported significant challenges from “operational and back-office perspective”, expressing inability to fully transition “employees and critical functions to a virtual work environment,” says a Deloitte Canada report. There’s also been a significant rise in call center volumes leading to challenges in customer service expectations, adds the report.

Moreover, insurers must have robust systems to navigate the rapidly changing regulatory landscape amid the pandemic.

In these testing times, insurance sector’s business continuity is stressed out. Lack of accurate risk disclosures, dropping share prices for publicly traded firms, scrutiny of underwriters and third party services providers (TPAs) can lead to Directors and officers (D&O) claims. However, as mentioned above, several insurance providers are relaxing time-bound policies and payment of claims and assisting Canadians during these distressing times of COVID.

Merger and acquisition (M&A) in the insurance industry are also under spotlight in pandemic times. An Ernst & Young post claims that M&A and consolidation activity will be constrained in short to medium term but will “accelerate underlying” trends in the long run.

Sector consolidation will be based on rise of new insurance ecosystems and disposing of legacy businesses while profoundly changing the nature of M&A transactions in the future, adds EnY.

3. Liquidity and Insolvency

The coronavirus pandemic has thrown an immediate capital and liquidity problem for the Canadian insurance industry. Insurers are experiencing several “asset, liability, and investment pressures,” says KPMG study.

On asset side, brokers struggling to bring onboard new business proposals as clients slash spending. While on the liability side, payouts have shot up over claims (and litigation), increasing outflows. Finally, on the investment side, “ultra-low interest rate environment” is diminishing investment returns in an already volatile financial market, says KPMG.

Canada’s Office of the Superintendent of Financial Institutions has eased some regulatory policies to reduce this operational burden.

Changing Circumstances

Turbulent times also mean accelerated measures. In the last four to five months, the insurance firms have beefed up their digital capabilities and relaunching or reprioritizing their planned initiatives such as automation of claims, robo-advisers, virtual assistance/call centres, and self-serve capabilities.

Product offerings have also evolved under these changed circumstances and more free virtual health services are on offer.

However, the industry is on the brink of being overwhelmed and federal and regulatory support is essential. Government should consider relaxing timelines and standards for regulatory requirements and deferring tax collection based on premiums paid.

Summary

• One in seven small- and medium-sized businesses are likely to declare bankruptcy or shut down due to the pandemic, says Canadian Federation of Independent Business
• Federal government has rolled out Canada Emergency Business Account (CEBA) to help small business weather the downturn
• Business loans can be sought from banks, financial institutions and online and community lenders

Canada is home to nearly 1.2 million business enterprises of which a whopping 1.18 million or 97.9 percent are small businesses, says Statistics Canada (December 2018 figures). Just 1.9 percent or 22,266 qualify as medium-sized businesses, while 3,010 or 0.2 percent are large businesses.

Any organization with less than 100 paid employees is defined as a small business, as per the Canada Revenue Agency (CRA). Businesses employing between 100 to 499 individuals qualify as medium businesses and any place with over 499 employees forms a large business.

Small businesses also employ 97.9 percent of the private sector workforce and are a critical part of the Canadian economy. Between 2012 and 2016, over 95,900 businesses were created every year while more than 90,000 disappeared, says federal statistics body StatsCan.

Employment Contributors in Private Sector by Business Size (2013-2018)

(Source: Statistics Canada, Labour Force Survey; and ISED calculations)

As markets shuttered following federal lockdown measures, the small businesses segment suffered the most. One in seven small- and medium-sized businesses are now at the risk of going under due to the pandemic crisis, says the Canadian Federation of Independent Business (CFIB).

In March 2020, Canadian business loans grew at the fastest pace in nearly 40 years (since 1981) as companies sought out credit to stay afloat during the coronavirus crisis, highlights a Bank of Canada report.

To safeguard financial needs of the small and medium businesses and save them, the federal government has rolled out the Canada Emergency Business Account (CEBA). Apart from the CEBA, these businesses can also borrow from banks, credit unions, online lenders and community loan funds.

Here is a brief look at the lenders and the credit programs:

1. CEBA

The C$ 55-billion government-backed CEBA program offers C$ 40,000 loan that is interest-free until December 31, 2022. Of this, C$ 10,000 or up to 25 per cent of each loan will be forgiven if the remaining amount is paid on time. For those unable to repay by December 31, 2022, the loan can be converted into three-year term at 5 percent interest rate.

The program was launched on April 9 to support small businesses and not-for-profits by providing financing to safely navigate the shutdown period and relaunch when the economy reopens. CEBA will soon be adopted by over 230 financial institutions, including banks, across the country. To apply, borrowers need their T4SUM summary document and 15-digit business number from CRA or employer’s account number and bank account information. ?

2. Canada Small Business Financing Program

Under this federal program, applicants can borrow a maximum of C$ 1,000,000 at an interest rate (variable or fixed) determined by the financial institution. Of the entire loan amount, a total of C$ 350,000 can be used to purchase leasehold improvements or improving leased property or purchasing /improving equipment. The loan cannot be used to fund working capital or inventory.

All small businesses and startups with gross annual revenues of $10 million or less and operating for profit in Canada are eligible for these small business loans. Not-for-profit, charitable and religious organizations and farming businesses are not eligible to apply for this program. For more details, visit here.

3. Credit Unions

Credit unions are owned by private investors in not-for-profit status. Like banks, they offer savings accounts, credit and debit cards, ATM facilities and loans, etc. Credit unions offer competitive interest rates. However, to qualify for the loan, borrowers need to become the credit union members and have good credit scores, collateral, and strong business plans.

4. Online Lenders

The number of online lenders and lending platforms have multiplied in the last few years. They offer competitive rates and terms that suit the small business ecosystem. They have easy approvals, no collateral requirements and a quick application turnaround time. Some of the online lenders are Loans Canada, OnDeck and SharpShooter Funding.

5. Community Loan Funds

Several non-profit organization funds provide flexible, low-cost loans and investments to small business, especially to those that do not qualify for bank loans. These funds aim to help local business, especially small businesses owned by people of low-income group, women and minorities.

Requirements for Procuring Small Business Loans

Before applying for small business loans, the borrowers need to keep in mind the following facts:

1. Collateral

Several banks and financial institutions offer loan capital only if backed by collateral such as real estate, vehicle and stocks. Lenders often conduct a loan-to-value analysis of the proposed collateral to make ensure there is no loan default.

2. Credit Score

Two aspects come into play here:

1. Personal credit score
2. Business credit profile (credit score and credit history)

Both these details allow lenders to weigh the application through creditworthiness.

You can ask for your credit data from the Office of Human Affairs and business credit profile from business bureaus.

3. Cash Flow and Financial Statements

Financial statements and cash flow projections are used to measure the business and the borrower’s ability to repay. Applicants need to justify the loan amount they seek via strong and valid business projections, including profitability. Financial institutes generally measure the cash expenditures against income to determine the cash flow and service debt.

4. Business Plan

A detailed business plan, outlining projections such as cash flow, profit, product line and market size, can demonstrate the company’s sustainability. The plans also need to explain how the sought funds will be utilized.

5. Documents

Other documents the borrowers need to provide include tax returns, income statements, T4SUM and insurance policies.

Summary

• Credit seekers should carry out in-depth research on the viable options prior to access funding
• The increasing competition in the changing landscape of the banking industry through the emergence of fintech firms has made securing business loans a lot simpler

Accessing credit is perhaps one of the most critical factors that a business must consider for financing its ambitions. It enables businesses to achieve their targets and undertake expansion activities while empowering economic prosperity in the long term.

During the unprecedented crisis caused by the novel coronavirus, we came across several businesses making announcements on the London Stock Exchange (LSE) related to fundraising, either through a bank loan facility or a revolving credit facility (RCF). These two methods were frequently exercised by publicly listed companies to secure business loans. This kind of fundraising is usually meant for meeting the short-term requirements of the businesses.

According to a recent report published by Bank of England (BoE), the UK based corporates accessed an additional credit of £7.4 billion from the banking system in May 2020. Bigger businesses repaid loans worth £12.9 billion. The additional borrowings were primarily driven by Small and Medium Enterprises (SMEs), which accounted for nearly £18.2 billion. These additional borrowings include loans disbursed through Bounce Back Loan Schemes and other similar government-supported schemes.

In addition, the private sector businesses in the UK borrowed a total of £11.4 billion from the financial markets and the banking system in May 2020. A much stronger borrowing of £31.8 billion was witnessed in March 2020 as the lockdown was imposed by the British government followed by £14.0 billion borrowing in April 2020.

Must read: Global Loans Unmanageable; High British Debt Could Trigger Another Financial Crisis

It is a well-known fact that bigger businesses get cheap and easy access to credit in comparison to smaller businesses. SME’s constitute a major chunk of the UK’s economy and have a significant contribution to the UK’s economy by providing a large number of employment opportunities. Therefore, a larger number of lenders are willing to fund these businesses.

However, the seekers of credit should carry out in-depth research prior to accessing funding as the terms of each lender could be different – providing you with the distinct cost of financing. It is imperative for credit seekers to act astutely in evaluating various financing methods.

Banking is about lending money and earning interest out of it. The Banking industry has become very competitive with disruptive offerings coming up, such as Peer to Peer (P2P) lenders. The conventional bankers have migrated to paperless banking with the evolution of online applications. Most of the banking services, including loan disbursement services, are offered online.

Also read: P2P Lenders Draw A Parallel Banking Industry Amid Covid-19 Crisis

However, before making a final decision of choosing a lender, one must pay attention to detail such as processing charges, payment schedules, applicable interest rates, tenure of the loan and flexibility options such as foreclosure.

Just like mortgages, the applicable interest rates might be of two types: fixed and floating. The interest rate remains unchanged over the tenure of the loan in case of a fixed interest rate. However, the interest rates keep on changing from time to time, according to the underlying benchmark used by the lender as per the prevalent monetary policy in case of a floating interest rate. There is no rule book of making a choice between the applicable interest rates. However, the tenure of the loan would be an important factor to make a choice between the two.

The increasing competition in the changing landscape of the banking industry through the emergence of fintech firms, securing business loans has become easy. Let us look at debt financing from different perspectives.

• Loans v/s Crowdfunding

Traditional bank loans come into our minds whenever we think of debt financing options. This method of financing often requires the loan seeker to maintain a good relationship with the bank. In addition, the loan seeker must be able to convince the bank regarding the appropriate usage of funds. Upon successful validation of a well-researched business plan presented by the credit seeker and good credit history, the bank might offer debt on competitive interest rates. However, this process of raising finance could be time-consuming. Barclays Plc (LON: BARC), Lloyd Banking Group Plc (LON: LLOY), HSBC Holdings Plc (LON: HSBA) and many other options are there to seek access to conventional loan products.

On the flip side, crowdfunding is about raising money without any intervention of the banks. This can be done seeking credit from P2P lenders or through the issuance of shares (equity fundraising). Crowdfunding provides access to a larger pool of resources for raising funds due to which the cost of financing could be lesser in comparison to traditional loans. Zopa Group, which was recently awarded full banking license by the FCA, is a veteran in the P2P lending space.

• Secured Loan v/s Unsecured Loan

While disbursing a secured loan, the lender would ask for a collateral or security, which could be confiscated in case of a default from the credit seeker. The security would be used by the lender to cover the cost of the loan, and usually has a high monetary value. Moreover, the loan amount is often a function of the value of the collateral. For instance, loan against property or Gold. On the contrary, an unsecured loan is offered based on the risk and credit profile of the business. Funding Circle, Barclays, NatWest, and many others offer both kinds of loan products.

• Start-ups v/s Established businesses

For brand new businesses, government-backed finance is available through the Department for Business, Energy, and Industrial Strategy (BEIS) under which business could borrow up debt and repay at a fixed rate of interest. However, some mainstream banks, including NatWest do offer loans for start-ups. A £40 million fund has been recently announced by the government for green start-ups.

Existing businesses must provide credit history, financial position, and future estimated earnings to secure loan from the banks. Barclays, HSBC and many others provide loans to established businesses having a stable outlook.

In addition, depending upon the nature of the business, the credit seeker might get an option of raising funds through venture capital or angel investing. But these options would dilute the ownership of the business.

Maybe the most basic aspect after a business has ensured the necessary financing is being able to repay the debt obligation. It might include estimating the income, using profits to reduce the debt obligation, debt restructuring or syndication, and so forth. In addition, estimating budgetary requirements by arranging your business would keep you familiar with the commitments and the ideal targets, which would empower you to meet those commitments.

Since most of the large insurance companies do not cover incidents like pandemic, the liabilities in their books have not increased. However, there are some who do have policies that cover situations like that of a pandemic induced business disruptions. These companies are the ones which are now feeling the heat of payment and are in a deep distress given the magnitude of the claims. In the meantime, the government has also asked the insurance industry to make prompt payments on legitimate claims so that no business goes bust in need of money. Nearly two third of the businesses in the country have temporarily shut their businesses and put majority of their staff under the benefit of the governments’ furlough scheme. Last week, the government after carefully considering the healthcare situation in the country decided to extend the lockdown conditions by three more weeks, ensuing that the losses on account of the lockdown would continue to mount.

The Association of British Insurers (ABI) though terming the amount of £1.2 billion as a working estimate, has stated that the claims are basically of three categories, Business disruption claims £900 million, travel claims £275 million and events claims totaling £25 million.

Regarding the claims made by some businesses on account of losses faced by the pandemic, the association stated that while many would believe that their policies cover losses on account of pandemic, but actually they may not. On this issue, many of the small businesses like pubs and restaurants have come together and decided to institute legal action against erring insurance companies. They claim that certain insurance companies like Hiscox sold policies which stated that the insurer shall payout where the interruption to the business would be on account of restrictions imposed by a public authority following an occurrence of a notifiable human disease. To an ordinary individual, the above explanation would seem absolutely clear about the policy covering the current pandemic situation, and the companies’ refusal to pay sounds like an attempt to un-necessarily complicate the issue or in a labyrinth of legal jargons to avoid payment.

Roger Topping who heads legal firm TopMark Adjusters, which is helping the small and midsized businesses in their claims against the insurance companies, stated that the massive scale of losses that have been incurred because of the pandemic has been prompting many of these insurance companies to look for legal loopholes to avoid making payments. He stated that his clients would be putting in a strong case against the insurers, and that either the insurers pay up or the government should step in to get the claims settled.

The situation although seems unprecedented for the insurance sector, the current payout claims that it is facing are not even close to the insurance premium it collects every year. The impact of losses at this time is being felt the most by the small and medium sized businesses, who are largely dependent on their cash registers. Large companies though are backed by insurance policies, but are mostly secured with their deep pockets and have shown potential to be able to sail through the current choppy weather without much of the help coming in from either the government or insurance companies. The small businesses on the other side face the risk of extinction, and therefore believe that if this is not the situation when their insurance claims should be of help to them, then there may not be any. The critical aspect here, however, is timing, currently the institution of legal action seems to take a lot of time. Should any of the sums do actually become due to these businesses, the payment might take too long to reach out to these businesses, risking their survival. The insurance companies had been asked a few days back by the Bank of England to re-think on their dividend payments for the quarter, the executive bonuses and other such payouts in order to conserve money and meet the claims arising out of the current economic slowdown. The legal advisors to the small businesses, who are instituting legal action against the insurance companies, have also pointed out to the massive legal fees that their clients are bearing to file their claims and given the circumstances, a huge expense like this is being taxed on their clients. They suggest that the country at this times needs an arrangement along the lines that was adopted by the Northern Ireland government for claims arising out of riots and flood and have also been witnessed in Northern Ireland at the height of its troubles, helping settle a significant number of claims in that country.

This is not the first time the insurance sector in the country is faced with a series of claims. Previously, this year also the country had witnessed massive floods which had caused significant damages to business and property, the claims of which are still laying heavy on the shoulders of the insurance sector. Though a majority of the industry is not exposed to the any claims arising out of the pandemic, but for the few who had offered such policies, the situation might get murkier once they reach courts.

The British government has gone all out to protect the businesses in the country and the jobs of the millions of people amid coronavirus crisis. The amount of money that the government is spending to protect these businesses and workmen is massive compared to the claims that the insurance firms admit. The market believes that it would be prudent at this stage for the government to step in and play a part so that all genuine claims get paid up as soon as possible while also ensuring that the insurance companies are well protected.

The insurance industry of the United Kingdom ranks in the top five across the globe and is one of the biggest in Europe. The UK's insurance sector is one of the largest contributors to the economy in comparison to any other similar sectors. At a basic level, the insurance sector can be broadly classified into two main categories, Life insurance and General (Non-Life) Insurance. Life insurance is a contract between the insurer and the policy buyer for a certain sum of money which would be paid either after a set period or on the death of the insured person. General or Non-Life Insurance caters to the specific needs such as Motor insurance, Travel Insurance, Home Insurance, Health Insurance, Fire & Theft Insurance, and many other specific needs.

Financial Conduct Authority (FCA), the conduct regulator had recently released what it expects the insurers to do, given the unprecedented impact of coronavirus, as many consumers are currently in a vulnerable position. FCA expects the insurers to address their customers’ needs in a flexible manner as they have little control over the claims under these circumstances. FCA also expects clear communication regarding any policy exclusions from the insurers, which may impact the cover and use of individual policies in both new and existing policies.

On the same time, all the non-life insurance companies are expected to manage the operational impact of the Covid-19 pandemic by having business continuity plans in place along with robust systems and controls to continue to operate effectively. Insurers are supposed to perform with honesty, due diligence, and good professional standards in the best interests of customers.

Due to an unprecedented economical impact of the coronavirus outbreak, which is likely to prolong for at least few more months, would probably impact the small and medium-sized business owners who fear complete catastrophe of their business operations. Typical business interruption policies pay up to £100,000 to cover for unprecedented circumstances, such as flooding or fires to support the businesses. Business owners might plan some legal action against UK’s largest insurance companies.

According to the Financial Conduct Authority, most of the claim applications were regarding business interruption during the pandemic, which did not have the right coverage to warrant a pay-out. The claimants had the basic cover which do not include the pandemics. However, FCA believes that this might be very disappointing for the policy buyers. Moreover, the supreme authority has said that it no plans to intervene on behalf of the businesses and has also warned the UK businesses that most of them would not be eligible for insurance coverage amid the pandemic lockdown.

On the same time, the Financial Conduct Authority has asked the insurance companies to entertain claims in a speedy manner to firms or be ready with an explanation for the delay. The FCA clarified that if the claims can be settled partially but not in full, on reasonable grounds, the insurers must make an interim pay-out. This move is to protect the interest of the businesses and relieving pressure amid the Covid-19 lockdown.

If the insurers are not processing the claim applications, they need to explain the industry watchdog as to how they made the decision. FCA has asked the insurers to expedite the process in order to ensure that financial pressures on businesses are not aggravated by slow processing of claims and should be processed in a quick and efficient manner.

The supreme authority aims to support consumers and businesses in the prevalent pandemic crisis. The industry watchdog has asked the insurers for quicker claim settlements specifically for the small and medium scale businesses which got impacted due to the coronavirus outbreak. However, FCA has not yet intervened in the matters of individuals' policies.

Some businesses are on the verge of shutdown, due to insurers refusing to settle their claims as a result of the Covid-19 lockdown. As most business interruption policies which are held by small and medium-sized businesses did not include pandemics coverage and have basic cover; therefore, the insurers can deny the processing of claims with respect to the novel coronavirus.

Insurers and the pandemic scenario

The insurers on their part are taking into the account that this a critical hour for most of the businesses and they will put their best foot forward in settling valid claims and making interim payments to their policyholders.

In order to maintain their sales and meet increased demand amid the outbreak of the coronavirus pandemic, life insurance companies are open to finding workarounds and new solutions.

Amid global lockdown, people are advised to stay indoors and maintain social distancing. In the present scenario, medical tests which were done earlier before underwriting the policy cannot be conducted now. Hence, the medical exam for life insurance is becoming non-essential.

Insurance companies have adopted smarter ways to operate in these new circumstances and are creating new ways of underwriting new revenue streams. In addition, the insurers are relying on data for underwriting new policies, which includes information from prescription databases, electronic health records & medical history and other related records.

Though there are some fallouts as well, some life insurers are going to discontinue policies for people aged 70 and above. Prudential Plc has discontinued its long term (30-year term) life insurance, though plans for the short term are still available.

In terms of market capitalisation, UK has some of the biggest insurance companies. Prudential Plc (LON: PRU), Aviva Plc (LON: AV.) and Legal & General Group Plc (LON: LGEN) are some popular insurers in the United Kingdom.

• Prudential Plc at the time of writing on 17^th April 2020 (10:38 AM GMT) was trading at GBX 1024.00, up by GBX 60.81 points or 6.31% from its previous day’s closing of GBX 963.20.

• Aviva Plc at the time of writing on 17^th April 2020 (10:40 AM GMT) was trading at GBX 247.40, up by GBX 6.30 points or 2.61% from its previous day’s closing of GBX 241.10.

• Legal & General Group Plc at the time of writing on 17^th April 2020 (10:49 AM GMT) was trading at GBX 207.10, up by GBX 12.65 points or 6.50% from its previous day’s closing of GBX 194.45.

Disclaimer

The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

It is no secret that both established and new businesses require money for their daily operations, and short as well as long-term growth. The amount may vary, depending on the objective. For instance, businesses that are in the process of expanding can require more capital (and an additional amount as growth stages pace further) than those that are merely addressing challenges.

However, in current economically disrupted times when market volatility is taking a toll over businesses of every realm, liquidity crunches and a dearth of finances are huge concerns. As businesses thrive on creating a nest egg before the macro and micro-environment hit even harder (amid the COVID 19 outbreak and ongoing fear of recession), the concept of business lending is gaining traction in Australia, as it is across the globe.

Business Lenders - A Sneak Peek

As the term suggests, business lenders are companies that lend money to businesses that require it to meet their objectives. One can consider business lenders to be an informal bank. Informal, as the process of lending is relatively swift, simple and accessible, compared to other financial institutions.

This is how the process typically works - businesses apply for a loan (a term loan, for example) and the business lender grants the specified amount of money required by the business. As per a clause between the two parties, the business pays back the amount (plus interest) over a period.

Compared to banks, business lenders have been known to be less picky, quick decision-makers, far more receptive, and go comparatively easy on credit scores.

You would be wondering - how do business lenders acquire the funds necessary to issue loans? Their biggest source is ideally arrangements with investors.

GOOD READ- Guide to Business Lending: A Look at Key Lenders in Australia

Now that we have acquainted ourselves with the brief concept of business lenders, let us look at three lucrative Australian companies from this business background:

NobleOak- Simple Belief in “Doing the Right Thing”

An independent Life Insurer, NobleOak is highly accoladed and regulated by APRA. It has more than 140 years-worth experience. The insurer offers life insurance combining quality, no-surprises cover along with lower premiums and personal service.

NobleOak’s product range includes:

• Life Insurance- one can apply for a Life Insurance cover (up to $15 million).
• Income Protection Insurance- up to 75% of one’s income (up to $30,000 monthly).
• Total & Permanent Disability (TPD) Insurance- Up to $5 million of cover available.
• Trauma (Critical Illness) Insurance- 38 conditions covered (incl cancer, heart attack and stroke), Up to $2 million of cover available.
• Business Expenses Insurance - offers protection for fixed business expenditures (for up to $25,000 every month)
• A cost-effective and flexible SMSF Life Insurance.

These products are backed by Hannover Life Re, a leading global reinsurer for extra security.

The Company is regarded amongst one of the country’s longest-standing life insurers and recently launched a new targeted advertising campaign.

AAMI - "Lucky you’re with - AAMI"

A part of the Suncorp Network, AAMI is one of Australia's largest and most awarded insurers with an experience of more than 40 years. Driven by its humorous television crash commercials, the Company is known to have revolutionised the marketing of insurance products and services in Australia.

Its product range includes:

• Car Insurance - AAMI provides car insurance to over 1.8 million Aussie drivers.
• Home Insurance - catering to around 800k Aussie homes, the Company covers buildings, the contents inside it or both, costs for repair or replacement and other costs such as liability for injuries to others.
• Life Insurance & Income Protection - including accidental injury insurance
• Business Insurance - More than 60k businesses in the country use this product in Australia
• Health Insurance - AAMI is well trusted to help find a private health insurance product to cater to one’s lifestyle and budget and is curated for singles, couples, single parents and families.
• Travel Insurance - The Company offers comprehensive international travel insurance for singles, couples and families. Inclusions are delays or cancellations, medical expenses, and baggage issues, to name a few.

Besides helping Australians with attractive insurance policies, AAMI actively supports the community. For instance, Melbourne’s AAMI Park is one of the world's finest stadiums to view rectangular codes. The AAMI Victoria Derby Day (first day of the Melbourne Cup Carnival) is an awaited event and is the oldest and most prestigious horse race in Australia. The Company is also the co-major partner of A day on the green, a famous live music series.

As part of the AAMI Apprentice Support Program, the Company contributes around a million dollars to help repairers recruit and train high-calibre apprentices. It also runs the Skilled Drivers course where drivers under 25 are instructed in safe driving techniques using their own cars.

Club Marine - More Than Just Boat Insurance

Club Marine Insurance is Australia’s largest provider of boat and pleasure craft insurance. It has an experience of more than 50 years. It is backed by Allianz, which is amongst the country’s largest general insurers.

The Company services are fit for sailors, fishermen, water skiers, jet skiers and boaties of all kinds. However, Club Marine Insurance is more than just boat insurance as it actively supports over 00 yacht clubs, fishing tournaments, boat shows, regattas and volunteer marine groups.

Customers have the option to avail a range of exclusive member benefits once they join the Company-

• Club Marine Member Rewards - also available on the Club Marine App
• Club Marine Assist - round-the-clock support and unique personal service at no extra cost
• Club Marine App to stay updated with weather, events etc.
• An exclusive clothing range
• The Company has a network of service centres, riggers, and surveyor service providers to help select service and repair options

GOOD READ- Applying for Business Loans & Types of Business Loans

Bottomline

As deciphered, Australia offers a hoard of options that can be customised at the customer’s discretion. When one has a myriad of options of insurance companies to compare and then select, decision making is easier and safer. What’s important is to tap an optimal deal and secure one’s assets, irrespective of how the economic scenario is prevailing in any region.

Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.