Insurers have pushed up motor and home premiums in the London borough where Tony Blair once lived to the highest in the country. Danny Walkinshaw explains why.
When Tony Blair swept to power in 1997, the borough in which he lived, Islington, was hailed as the home of the chattering classes. But no more. A recent report showed that Islington was now the most expensive place in the UK to get insured.
Research carried out by EMB, the actuarial consultancy, revealed that people living in the borough would pay more for insurance on their cars and homes than anywhere else in the UK, with an average combined premium of £745, compared to £373 in South Cambridgeshire.
So how has leafy Islington fallen so far? Insurance Times went there to find out.
On a wet, miserable day in Islington it was no surprise that the mood was grim. Locals have been dealt a tough blow by insurers, which have pushed up premiums in the borough.
It is well known that insurers consider a range of factors when pricing premiums on home and motor policies. These can range from the street that someone lives in to the jobs of the individuals living there. But Islington, it seems, has borne the brunt of the new technology and statistics available to insurers in today’s market.
EMB partner Karl Murphy joined Insurance Times on a walk around Islington to explain why the borough came out top of the list of the most expensive insurance.
“The whole point of doing this analysis was to highlight the change in insurance risks by location,” he says. “For something like car insurance the key feature that affects risks geographically is density. As you can see, the surrounding area like this is high density and relates to the crime risks associated with it.”
Islington is well known for its leafy suburbs and cosmopolitan lifestyle, but it is the borough’s darker side that has given insurers reason to increase premiums.
Crime has had a particular impact on the area with car-related thefts and burglary well above the national average. High levels of violence and drug crimes also influence premium rates.
“There is no doubt that crime rates in Islington, certainly from police statistics, are quite a way higher than the national average,” said Murphy. “Thefts from motor vehicles are two and a half times the national average.”
One area of Islington which made headlines last month was Blackstock Road in Finsbury Park. One morning, 600 police officers in riot gear descended on the shopping street described as a one-stop-shop for crime and where up to 40% of stolen mobile phones in Britain are sold on.
More than 70 people suspected of trading in drugs, stolen goods and fake passports were arrested in the day-long operation, just a short distance from Finsbury Park Mosque and Arsenal’s Emirates stadium.
Blackstock Road is a much calmer place now and, according to Murphy, the raids have helped to identify the problems, which could in turn benefit residents’ premiums.
“The good thing about the raid on Blackstock Road is that it highlighted an issue and provided a bit more awareness of the crime problem in the area,” he said. “There is quite a lot of criticism of the amount of time police spend on paperwork, but they are working to gather data that will help in crime prevention.
“Insurers use the data available to police to help to reduce premium rates.”
Another issue which insurers are interested in is that parts of the borough are prone to subsidence, providing good reason to raise the price of building and contents insurance.
Walking around Islington, Murphy identified many houses surrounded with scaffolding as people battle to save their sinking homes.
He said: “In the north west of the borough and around Arsenal’s stadium there is a combination of bad, clay based soil and lots of trees. With 15 long hot summers the trees will suck all the moisture out of the ground and cause subsidence.”
But it doesn’t stop there, as traffic volume is particularly high a huge amount of street parking adds to Islington’s woes.
“There are not many driveways and I have not seen a garage since we have been here,” claims Murphy. “Residents have no option other than to park in the street which doesn’t help in terms of preventing theft from cars. It is easy to walk down the street and break into a car.”
The borough of Islington provides a huge level of contrast with homes in some parts, such as in Blair’s old manor, costing well over £1m and others not at all attractive. Murphy says: “In a place like this you have some nice areas close to less desirable places. That is probably the worst combination, because with a relatively affluent population living fairly close to a deprived area, most burglaries are carried out by young deprived men who live within walking distance of an expensive home.”
The borough is working hard to stamp out its problem, but it remains to be seen if insurers will take note.