Money talks when it comes to Hibernian

IN the land of the little people, nothing makes sense any more. Just when possession of a BMW and a Ballsbridge address seemed a sure ticket to one tribunal or another, along comes this nice man to reassure such owners that, in fact, they are the real victims, "penalised for too long".

Fret not, my affluent friends, this siren seems to say: with your BMW and Ballsbridge penthouse, you are safe indeed in the arms of Hibernian.

Like it or not, it's cheaper car insurance for you from now on, maybe even 15 per cent cheaper if you're very, very clever and respond to this subtle message.

As for you lot stuck out in Tallaght, with your massive mortgages and rotten public transport, you think you have worries? Bah, just wait for the 25 per cent loading you get from us.

In several months of surreal developments which have left the average citizen feeling duped and furious, what distinguished Hibernian's pronouncements this week was its timing.

It hardly required a PR guru to point out that this was not the moment to launch a bald assault on the struggling masses and heap blandishments on the wealthy. Nonetheless, through its chief executive, Mr Adrian Daly - a smart man by all accounts, well accustomed to media briefings - the term "burdened borrowers" as a pejorative term stamped itself on the public consciousness for the first time.

We heard that burdened borrowers - predominantly young couples with hefty debts - are "bad news" for the industry because they make more claims. And why do they make more claims? Because "lifestyle analysts have pointed to the fact that people who are very heavily burdened by debt, who are under pressure and stress because of that, can tend to be more frequent claimants", in the words of Mr Dick O'Driscoll, Hibernian's head of underwriting.

So not the sort of business "lifestyle analysts" dream about then, unlike say, KBIs (key business influencers), a term we learnt in last week's class given by bankers from AIB, another mighty Irish institution.

Last week KBIs were merely known for their fabulous treatment at the hands of the Uriah Heeps of the lending institutions. This week we see that they are more, much more. What makes our KBIs special is that they have managed to be KBIs and burdened borrowers all at the same time.

The lesson the little people have absorbed in recent weeks, therefore, is that KBIs who are burdened borrowers never cower in little homes with their little families dreading the 25 per cent loading on the motor premium or a demand for the return of the cheque book.

They proceed to buy islands and Gandon mansions. Their chequebook facility will never be withdrawn because this would be "somewhat of a slur on their character".

Best of all, the Uriah Heeps will never do anything as outlandish as demand their money back from a KBI because it suits them to believe that the plain people will be incensed if they do. (I cannot speak for all the other plain people, but personally I would have been charmed. Truly infuriating in those dismal times would have been the discovery that the banks tormented only certain categories of customer).

The key difference, perhaps, between merely burdened borrowers and "KBI-burdened borrowers" is that although Charles Haughey, say, was a borrower, he was not burdened by the attentions of insurance companies' "lifestyle analysts" who wondered where on earth the money was coming from or even whether the burden was putting the man under such "pressure and stress" that he might fabricate or exaggerate a claim against the insurers.

Then again, he never lived in Tallaght.

Nonetheless, he was, by any standard, a burdened borrower, somebody with "a significant debt situation".

But how was Hibernian to know this? the more fair-minded might ask. How would Hibernian access that kind of information about any of its customers for that matter?

Now there's a question. Although Hibernian spokesmen protested vigorously this week that Hibernian has not identified any such group of burdened borrowers; has no intention of doing do; that such information was none of its business; and that Mr Daly's little nuggets of information were merely thrown out for "illustrative" purposes to a bunch of startled journalists, the fact is that Mr Daly seems to know a good deal already about his burdened borrowers.

Not only does he know that they have a higher incidence of claims but he can pinpoint them sufficiently to assure us that they will see little respite in their premiums.

Hibernian's new strategy is to quote motor premiums based on an individual's bank balance, lifestyle and address. Just how it plans to do this remains a mystery, even for illustrative purposes.

Meanwhile, there is no mystery about the market Hibernian really wants. Come on in you "twenty- or thurty-somethings sporting three-series BMWs", ideally in Ballsbridge, Hibernian wants to atone for its past treatment of this gilded category. "Over-harsh" is how Mr Daly describes it.

As for the little people, they will no doubt be thrilled to learn that the reason for Mr Daly's meeting with the press this week was to announce Hibernian's 31 per cent increase in pre-tax profits in 1998.

And that its underwriting losses were nearly halved on the previous year.