Insurance costs go up during a recession

dunstonh

NU direct is for simple cases with standard properties. Its not designed to be used for more complicated purposes. A broker would have no problem placing your case and NU could be one of the companies available.

You are just going to the wrong place at the moment.

haggle_2

Car insurance only goes up if you havent already shopped around for a better car insurance price and compared lots of policies inorder to get low car insurance.

Well that's what happened to me. So if you've been waisting time on message boards and not getting low car insurance quotes go and get some

haggle_2

Car insurance companies staff, rent etc cost go down and people drive less to save money thus having less crashes.

It must only be a matter of time until car insurance policies come down.

dacouch

The reverse is more likely to happen

Dangermac

haggle wrote: »

Car insurance companies staff, rent etc cost go down and people drive less to save money thus having less crashes.

It must only be a matter of time until car insurance policies come down.

Dont think so haggle. Generally speaking, premiums are the lowest that they have probably ever been, in relation to the risk factor. Over the past few years, insurers have been losing money, not making money. With their capital resources (i.e their assets) reducing because of the current value of the stock market and the value of property, there is no way that insurance premiums are suddenly going to reduce. I would suggest that, if premiums only increase by say 15%, that would be a good result for the customer.

Dangermac

dunstonh

Car insurance companies staff, rent etc cost go down and people drive less to save money thus having less crashes.

However, to offset that possibility, you have more thefts, more frauds and the FSA, FOS and FSCS levies are going to skyrocket.

Also, you have increasing solvency requirements coming and as Dangermac says, car insurance has been mostly a loss maker for some time. That is not sustainable.

thor

dunstonh wrote: »

However, to offset that possibility, you have more thefts, more frauds and the FSA, FOS and FSCS levies are going to skyrocket.

Why during all these posts defending the insurance companies has nobody mentioned the big elephant in the room? They are quite obviously going to pay out even less and many more genuine claims will suffer. OK I may be making an assumption but then so are people going round saying that fraud is going to increase. In my opinion insurers will make certain they lose out less to fraud by reducing their payouts. At the end of the day we will bear the brunt of an increase in premiums while getting less protection for our money.

dacouch

I can assure you these posts are not defending the Insurers, they are simply Dunstonh, myself and others in the industry stating the facts as to why the premiums are unlikely to reduce and if anything are likely to go up.

You are correct in that Insurers have increasingly more complicated methods to detect fraudulent claims and have systems such as central databases to assist this.

Technology will no doubt help this, however technology will also assist potential fraudulent policyholders. They can now log onto forums and receive advice from other people on how to do it. They can also go on websites such as ebay and buy damaged LCD televisions and lap tops etc and put claims in for these (Have a look at how many damaged beyond repair LCD tvs are on ebay and how much they sell for).

Insurers will no doubt communicate to their claims departments that they want them to tighten up on claims. This may have the effect of discriminating against genuine claims, one of the other advantages of technology is that more people realise what their rights are eg MSE and the like and will be able to fight their corner using this information and if needed by the ombudsman.

Insurance is all about paying peoples claims to their satisfaction, everyone in the industry genuinely want people to have their claims settled to their satisfaction as thats what our job is. Any one how does not have this ethos is in the wrong business. If you monitor the Insurance Forum on MSE you will see that their are a large number of us who are insurance employers (In all walks of Insurance) who help people out by answering their questions day in day out. We do this for no other reason than as with other MSE members we want to help people out.

I would say on balance that you are quite correct that the technology will help reduce these but fraudulent claims are one of many problems that Insurers have at the moment. The main reason premiums are likely to go up are the reductions in the returns in their investments and the reduced value of their investments (This means their assests are lower which has the effect on them offering cover to fewer policyholders and then the supply and demand effect kicks in).

LadyIndecisive

http://www.abi.org.uk/Newsreleases/viewNewsRelease.asp?nrid=17593

ABI fraud figures just out; a 17% rise in the number of fraudulent claims and a massive 30% rise in the value of fraudulent claims.

haggle_2

Yes that about how it's played out

dacouch wrote: »

Lol you have never seen a hard market, car crime will go up, fraudulent claims will go up. The main reason will be their investments will go down which reduces their capital this reduces their "Capacity". Say they have £1billion of liquid capital they may be allowed by the fsa to underwrite 1million policies at £1000 if the value of their capital or Capacity goes down to say £900m they will not underwrite 900000 policies at 1000 they would reduce the amount of customers they take on and increase the premiums. It supply and demand.

When premiums go up its called a hard market, it normally happens in a recession or when claims costs go through the roof.

Who owns directline, churchill...RBS....who has just announced losses of £28 billion...RBS

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5544524.ece

During the last proper hard market I had nightclubs who insurance premium was £13000 go upto £60000 a year. During the soft market there were lots of companies all competing for nightclub business. The hard market came along and insurance companies with drew from high risk parts of the market. They all withdrew apart from QBE. So QBE hard to charge higher premiums as their capacity was reduced plus they could charge what they wanted as it was a seller market.

Ask your underwriters at work to explain a hard market to you and what they expect to happen over the next 24 months and ask them what the last hard market was like