Financial Conduct Authority concerned over personal debt

The deadline for PPI claims is August 2019 and the FCA is overseeing an awareness campaign to ensure pay-outs are claimed.

Image copyright
Getty Images

Image caption

Andrew Bailey is the chief executive of the FCA

Mr Bailey said there had been a big increase in consumer borrowing, such as loans, overdrafts, credit card debt and car finance.

This echoes concerns raised by the Bank of England. Its Financial Policy Committee said there had been an acceleration in debt last year.

Consumer credit lending is still less than 10% of all lending by UK banks to household borrowers. It is also far smaller than mortgage lending, which amounts to 70% of loans to households.

But UK lenders stand to lose much more on their consumer credit loans if there is an economic downturn and their borrowers default on their credit card and other personal loans.

A Lords committee also recently called for stronger controls such as a cap on rent to own products.

The FCA is already conducting is own inquiry into overdrafts, door-to-door lending and other forms of guaranteed loans.

This includes considering whether a compulsory limit should be placed on overdraft charges. Consumer groups have consistently argued there should be one in place.


The FCAs mission statement also signals it is aiming to remain flexible in its response to Brexit.

The UKs decision to leave the European Union creates uncertainty for both the UKs financial industry and the FCA, Mr Bailey said.

Both we and the government are keen to ensure that the financial services industry remains resilient and well placed to meet users needs and thus make the most of opportunities in a post-Brexit world.

Leaving the EU inevitably creates a higher risk of disruption to our business plan priorities.

Mr Bailey was asked on the BBCs Today programme whether he would be happy regulating firms in the City if the UK had no say in making the European rules that firms in London may have to adhere to.

We cant just be a rule taker, that frankly doesnt work for any country, he replied.

Personal Finance Advice

Personal finance is one of the more popular topics on the Internet. Unfortunately, financial education is lacking at all levels of American society. This contributes to people getting into poor situations that are not necessary. Here are some tips that can help you get into great financial shape.

Minimize The Interest You Pay

Every dollar of interest that you pay to the bank is a dollar that will not go toward building your net worth. That being said, there are instances in which using leverage from debt can allow you to get ahead. For example, it might make sense to take out a mortgage on a rental property so that you can start to build a positive cash flow while letting others pay off your loan. Also, a student loan could help you get training for a job that could really pay off in the long run.

It might also make sense to take out a new loan to consolidate multiple other loans that youve taken out for whatever reason. These could be debts from personal loans or credit cards. Making one payment, rather than several, might free up some cash and allow you to pay off the debt more quickly. Of course, its a good idea to compare the loans that are available so that you pay no more interest than absolutely necessary.

Start To Save

Dr. Rebecca Moryl and Psych Department Host "How to Financially Support Yourself After Graduation"

As students approach graduation and more full-time job offers, salary negotiations begin to play a huge role into future financial stability. It’s all about knowing your worth and doing your research beforehand.

Moryl also stressed the lifetime availability of the Career Center for Emmanuel students. There are many pay scale salary surveys online that provide information on what someone of a certain major, age, and level of experience can expect to make.

The components that go into financial freedom are expansive. Start small as any amount saved contributes to the overall end goal. Just as many students have moments of thinking they won’t make it to graduation day for whatever reason, they usually do. Everything is attainable with organization and goal setting.

The full PowerPoint presentation and more financial resources from the event can be found here.

Merisa Boyd ’18 is a Staff Writerfor The Hub. She can be contacted at and on Twitter @merisafaith.

Negotiating repairs when buying a home

Almost every home (yes, even new construction!) has something, or several somethings, that needs repair. The purpose of a home inspection is basically so you know exactly what you are buying (including potential issues.) Of course, finding no problems is ideal, but very rare.

Inspection reports are notoriously long (even on a move-in-ready house) — but that is a good thing! You are paying to know, and knowledge is power! You know exactly what you’re getting into (or should back out of, in some cases.)

So, after the inspection report comes in … what do you do with it?

Why Is Reinsurance Group (RGA) Up 3.7% Since the Last Earnings Report?

A month has gone by since the last earnings report for Reinsurance Group of America, Incorporated (RGA – Free Report) . Shares have added about 3.7% in that time frame, underperforming the market.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, lets take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Reinsurance Group Q4 Earnings Beat, Decrease Y/Y

Reinsurance Group of America, Incorporated reported fourth-quarter 2016 operating income of $2.63 per share. Though the bottom line outperformed the Zacks Consensus Estimate of $2.50 by 5.2%, it deteriorated 7.4% from the year-ago quarter.

The company’s Traditional business in the US, Asia, the EMEA and Canada was strong in the quarter. The fourth-quarter results displayed the company’s earnings diversification in terms of both geography and product.

Reinsurance Groups operating revenues of $3.1 billion increased 6.5% year over year.

Net premiums of $2.5 billion rose 7.1% year over year on organic growth and moderate contributions from in-force transactions.

Investment income grew 6.5% from the prior-year quarter to $497.2 million. The average investment yield was down by 27 basis points to 4.69%.

Total benefits and expenses of Reinsurance Group increased 5.8% year over year to $2.8 billion. Higher claims and other policy benefits, policy acquisition costs and other insurance expenses, interest expenses, other operating expenses as well as collateral finance and securitization expenses resulted in the overall increase in costs.

2016 Highlights

Operating income of $9.73 per share improved 15.4% year over year.

Reinsurance Groups total revenue of $10.9 billion increased about 8% year over year.

Quarterly Segment Update

Reinsurance Group changed the name of its Non-Traditional segments to Financial Solutions in the fourth quarter.

US and Latin America: Total pre-tax income soared 33.7% to $190.5 million in the quarter.

The Traditional segment reported pre-tax operating income of $129.3 million, up 63.7% year over year. The upside was backed by higher variable investment income and moderately favorable claims experience in the Individual Mortality business. Net premiums grew 4% from the year-ago quarter to $1.4 billion.

The Financial Solutions segment’s pre-tax operating income dipped 1.9% to $46.7 million. Nonetheless, the segment’s operating income was supported by favorable investment spreads. Financial Reinsurance business reported pre-tax operating income of $14.4 million compared with $15.9 million in the prior-year quarter, in line with expectations.

Canada: Total pre-tax operating income decreased approximately 20% to $38.8 million.

The Traditional segment’s pre-tax operating income declined 22.8% to $34.8 million. Net premiums increased 20% to $241.9 million driven by robust growth in individual mortality and a one-time amendment in 2016 on a creditor treaty.

The Financial Solutions segment’s pre-tax income jumped 20.6% year over year to $4.1 million on the back of favorable longevity experience.

Asia Pacific: Total pre-tax operating income plunged 70% to $12.3 million during the quarter.

The Traditional segment reported a pre-tax operating income of $18.5 million, down 48.2% year over year. Premiums were up 15.3% to $448.3 million on strong growth in Asia.

The Financial Solutions segment’s pre-tax operating losses of $6.1 million compared unfavorably with pre-tax operating income of $5.4 million of the year-ago quarter.

Europe, Middle East and Africa (EMEA): This region reported pre-tax operating income of $52.6 million, up 66.1% year over year.

The Traditional segment reported pre-tax operating income of $15.8 million, up 22.5% year over year. Higher premiums and a favorable adjustment associated with improved client reporting primarily supported the upside. However, the improvement was partially offset by moderately unfavorable mortality and morbidity experience in the UK Premiums inched up 0.5% to $301.3 million.

The Financial Solutions segment’s pre-tax operating income soared 95.2% to $36.7 million on the back of sustained favorable experience in both asset-intensive and longevity businesses. New businesses also contributed to the growth.

Corporate and Other: Pre-tax operating loss of $26.3 million was substantially wider than the year-ago loss of $16.7 million.

Financial Update

As of Dec 31, 2016, Reinsurance Group had assets worth $53.1 billion, up 5.4% from year-end 2015.

As of Dec 31, 2016, Reinsurance Group’s book value per share, excluding Accumulated Other Comprehensive Income (AOCI), grew 11.2% year over year to $92.59.

Dividend and Share Repurchase Update

The board of directors announced a quarterly dividend of 41 cents, which is payable on Mar 2, to shareholders on record as of Feb 9, 2017.

The board of directors authorized a new share repurchase program of up to $400 million of the company’s outstanding common stock.


For the intermediate term, the life insurer targets growth in operating income per share in the range of 5% to 8% and operating return on equity in the range of 10% to 12%.

Given that the investment environment is unlikely to change much from the current levels, the company anticipates deploying $300-$400 million of excess capital, on an average, annually.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There have been two upward revisions for the current quarter.