Another Car Insurance rip off!

raskazz

housesitter wrote: »

Get off it.
If you don't make a claim it's all profit less the admin costs.

Er, no it isn't. I assume you don't know how insurance works - profitability depends on the performance of the book as a whole not just an individual policy.

Wutang_2

raskazz wrote: »

Er, no it isn't. I assume you don't know how insurance works - profitability depends on the performance of the book as a whole not just an individual policy.

You should really avoid assuming...

I think if an individual does not make a claim then the insurance company has made a profit. Even the most patronising can work this out.

bryanb

Wutang wrote: »

You should really avoid assuming...

I think if an individual does not make a claim then the insurance company has made a profit. Even the most patronising can work this out.

I'm fairly patronising and you're wrong

raskazz

Wutang wrote: »

You should really avoid assuming...

I think if an individual does not make a claim then the insurance company has made a profit. Even the most patronising can work this out.

I take it you don't know how insurance works either? As an example: (Ignoring admin costs and return on investment for simplicity)

Say a profitable rate to cover a given risk is £200.

An insurer, to attract new business in the hope of making profit on eventual renewals, offers new business at £180 and sells 10 policies.

Half of those policies don't incur a claim but half do, to a total of £2000.

So the insurer has collected £1800 in premiums but paid out £2000. To say that it made a profit on the policies that did not incur a loss (at least in the first year of cover) is totally fallacious as insurance is based upon the pooling of risk.

Wutang_2

bryanb wrote: »

I'm fairly patronising and you're wrong

bless you.....

Rolandtheroadie

Suppose it's like mars bars. If I buy 50 at 20p each, sell 25 for 30p each but just decide to eat the other 25, I'll be £2.50 down.
Do you really think the 25 people that bought one will care about my profitability?
No. As long as they get cheap mars bars.

La-Cara

I had the same thing with kwik-fit insurance recently, they quoted me £120 more than last year, despite me now having more no-claims and the car being older needless to say I switched provider, and saved a couple of hundred pounds

dunstonh

Wuting needs to use the sarcastic smiley more.

Get off it.
If you don't make a claim it's all profit less the admin costs.

No point repeating the above posts answering but......... what were you thinking when you posted that?

dacouch

Insurance companies tend to make a loss of just about break even on the premiums they collect in total and then the claims they pay out in total. If they make an underwriting profit it is generally between 1 and 9% often they lose money.

They make money by collecting £100s of millions of pounds and then investing in many different things such as property, gilts, shares etc etc. (As stated by Raskazz).

The reason most peoples premiums go up in the second year is the Insurers offered a cheap premium to get their business in as a loss leader and then they increase the premium to an amount they can make a profit at in the second year on the basis that a certain percentage of people renew the policy. Most Insurers lose money on the first years premium in the first year as they have all the setting up costs and now days the "New customer Discount / Incentive". They look to make money in second year and onwards.

As returns on investments are currently very low thanks to the recession the Insurers are making far less on their investments so are looking to increase their underwriting profit to make up for this. So expect your premiums to increase a little bit over the next twelve months

Insurance is not always the best product to buy on price alone as in some cases you get what you pay for otherwise why would people go to M&S why do we not all shop at Lidl. It pays to have a look at the policy cover and do a little research into the Insurance Company. For further info on this have a read of the Swift Cover thread

rudekid48

bryanb wrote: »

I'm fairly patronising and you're wrong

:rotfl: :T