Property broker faces fallout from FSA HomeLet probe

Mike Ramsey

Mike Ramsey faces a number of challenges when he takes over as Barbon chief executive, with the property broker still facing fallout from the FSA probe into its subsidiary company Homelet.

Ramsey, who is currently chief executive of marketing company Concordia Spires, takes over in June.

The FSA probe into HomeLet is still ongoing and the company is continuing to try to correct its business procedures.

The City watchdog’s investigation led to former HomeLet managing director John Boyle and business development director Heidi Abbott being sacked in March for gross misconduct. According to reports in March, Boyle is anxious to clear his name and is ready to appeal against his dismissal.

Tenancy agreements

The investigation was prompted by the way HomeLet sold contents insurance through letting agents.

HomeLet’s letting agents had clauses in their tenancy agreements that meant tenants were compelled to take out contents insurance for their own possessions.

Such a clause breaks FSA rules, although, confusingly, tenants can be asked to insure their landlords’ possessions.

HomeLet has now overhauled its policy wording, carried out an internal review and retrained its staff and letting agents. The firm is also contacting policyholders to explain what happened, and is working out how many customers were affected.

New directors

Aside from dealing with the probe, Ramsey will have to gel together a team of directors that has undergone some big changes.

Respected current chief executive Martin Oliver is set to leave the business in the autumn to become chief executive of the A&A Group, although Barbon could not say exactly how his role would dovetail with Ramsey taking over.

Boyle has been replaced by former Letsure managing director Ian Fraser, who has in turn been replaced by previous Letsure head of products and marketing Andrew McMillan.

Barbon’s markets and acquisitions director Steve Brindley left in December last year, although he still retains a consultancy role with the firm.

Ramsey has held chief executive and senior roles at American Express, Aegon and AXA. He was previously Cigna European division chief executive, life, accident and health.

Barbon chairman Tim Redburn said: “His exceptional background in the insurance and financial services sectors, where he has led and grown a number of high-profile businesses, will be a major asset to the group.”

Talking points …

● Ramsey has much experience in pensions and life insurance, and Barbon chairman Tim Redburn rates him as a leader, but he has little background in general insurance or broking - how will he settle in at Barbon?

● Barbon’s directors have been passed over in favour of bringing in an outsider - how will this go down with them?

● Sources suggest that wrongfully requiring tenants to buy contents insurance is widespread - are there any other brokers making the same mistake?