Really peeved with Car Insurance

dunstonh

Do you really think the decision to offer insurance in the UK is anything other than a commercial one? If they could make more money elsewhere they would be gone like a shot.

Its generally regarded that the UK is the least profitable Western insurance market. That is why there are hardly any insurance companies left trading in the UK. Over 90% of them have closed their doors for new business. Most of them in the last 10 years.

I have knowledge of car insurance in Germany & France and both are considerably cheaper than the UK. I think someone posted a link recently that car insurance has fallen significantly this year in France (unlike the 20% plus hikes we are told to endure)

They dont have the FSA, FOS and FSCS sapping £3 out of every £10 earned.

vaio

raskazz wrote: »

......These figures which I used were from Admiral's 2010 interim results. The figures above really don't mean much though, as I explained earlier in the thread, a substantial portion of Admiral's profits are derived from activities other than motor insurance underwriting.

The FT article posted earlier http://www.ft.com/cms/s/0/020889b4-b01c-11df-939d-00144feabdc0.html?ftcamp=rss says that motor underwriting generated £23m of profit

As you say the other £100m comes largely from selling add-ons to motor policyholders.

Thinking about it, if the straight motor insurance side was only covering costs or even losing £23m it would still be worth them staying in the motor insurance market because it allows them to generate another £100m of profit by selling motor policyholders breakdown and legal cover etc.

A bit like Tesco selling 10p loaves to get punters in through the door so they can be sold more profitable lines.

It’s a bit of a sod if you are a baker trying to make a living by only selling bread (or an insurance company selling only motor insurance) but that’s big business capitalism for you.

mikey72

raskazz wrote: »

Which insurer or insurers have 'moved back into the market' this year in relation to private motor insurance? These figures which I used were from Admiral's 2010 interim results. The figures above really don't mean much though, as I explained earlier in the thread, a substantial portion of Admiral's profits are derived from activities other than motor insurance underwriting.

The figures mean a lot if they are totally different to the ones you quoted.
Quoting confused.com profits in your explanation doesn't really prove much as Admiral figures show they are about 10% compared to the car insurance profits.
I have provided a link that leads to Admiral's results, and Admiral seems happy with the results.
Axa now provide a direct motor policy, from Feb this year.
Generally industry figures are profitable, two of your three examples of loss makers are major banks, not the best performers to quote as an example.
As I explained in my post, and provided the link to the website the articles are on, if the insurance companies say they are raising premiums to provide their profit margin, I think they have provided the evidence for the op.

mikey72

dunstonh wrote: »

Its generally regarded that the UK is the least profitable Western insurance market. That is why there are hardly any insurance companies left trading in the UK. Over 90% of them have closed their doors for new business. Most of them in the last 10 years.

They dont have the FSA, FOS and FSCS sapping £3 out of every £10 earned.

90%?
I'm sure most of us can name dozens we have used since we started motoring, so who are the hundreds that no longer trade?
Rather than you post a long list, a link would be good.

vaio

vaio wrote: »

......I have knowledge of car insurance in Germany & France and both are considerably cheaper than the UK. I think someone posted a link recently that car insurance has fallen significantly this year in France (unlike the 20% plus hikes we are told to endure)

dunstonh wrote: »

...They dont have the FSA, FOS and FSCS sapping £3 out of every £10 earned.

Got a link for this 30%?. Could it be the French don't need the FOS & FSA because their insurance companies

vaio wrote: »

......looked after the interests of their policy holders in house (like they used to) and/or settled third party claims quickly and fairly.

mikey72

vaio wrote: »

vaio wrote: »

......I have knowledge of car insurance in Germany & France and both are considerably cheaper than the UK. I think someone posted a link recently that car insurance has fallen significantly this year in France (unlike the 20% plus hikes we are told to endure)



Got a link for this 30%?. Could it be the French don't need the FOS & FSA because their insurance companies

Maybe 20% on average, some groups are even worse off though.

My daughter got prices for the same car, a small peugeot.

Feb 2009, about £900
Mar 2010, about £1300
August 2010 about £2000

French quote August 2010, £850

dummy details, so same car, same driver, 17, no ncd, just passed test, no change at all to the quote we entered.

European insurance may be the way to go.

Bob_the_Saver

My (UK) Fully comp Insurance fell by about 18% to just over £100 this year. Nothing to do with no claims, it just came down.

raskazz

mikey72 wrote: »

The figures mean a lot if they are totally different to the ones you quoted.
Quoting confused.com profits in your explanation doesn't really prove much as Admiral figures show they are about 10% compared to the car insurance profits.
I have provided a link that leads to Admiral's results, and Admiral seems happy with the results.[/QUOTE]

Have you read the actual source? I have (http://www.admiralgroup.co.uk/pdf/rns/2010_interim.pdf). The point which you have missed, again, is that only £23m of Admiral's profit came from motor insurance underwriting, and prior year reserve releases provided £17m of that figure. By far and away the most profitable part of their business is the selling of ancillary products. They are making hardly any money on motor insurance underwriting when compared to the overall premium written.

mikey72 wrote: »

Axa now provide a direct motor policy, from Feb this year.

They already were offering direct motor policies through Swiftcover and were offering motor products through brokers, so that's not really a new entrant to the market at all, just a new method of distribution.

mikey72 wrote: »

Generally industry figures are profitable, two of your three examples of loss makers are major banks, not the best performers to quote as an example.

The examples that I gave were not banks, they were totally separate insurance divisions of banking companies. The RBS figure given is directly from the RBS Insurance Divisional results (http://www.investors.rbs.com/common/download/download.cfm?companyid=RBS&fileid=394510&filekey=3015c67f-3d7a-4446-832b-00bbb871b1c9&filename=divperformance.xls). And it's not just motor insurers owned by banks which are strugging. Specialists like Provident, KGM and Equity Red Star have all been loss-making recently. To claim that "Generally industry figures are profitable" in the UK private motor market is total nonsense, especially as you seem to have no examples of profitable business other then Admiral.

mikey72 wrote: »

As I explained in my post, and provided the link to the website the articles are on, if the insurance companies say they are raising premiums to provide their profit margin, I think they have provided the evidence for the op.

Nobody is in any doubt that insurers raiding premums. What I queried with Mr K were his allegations of collusion between insurers, for which there is no evidence whatsoever.

mikey72

Dan_Smith wrote: »

Do you mean where they insure the car instead of named drivers on the policy? IF so yes I would prefer that too, as anyone can drive it!!

There would probably be a lot less uninsured drivers (such as when someone thinks they have DOC on their insurance and doesn't), also it would be easier for the police imo.

No, the same as the uk, named driver, on a french comparison website, just using a french address, and everything else the same.

mikey72

raskazz wrote: »

Have you read the actual source? I have (http://www.admiralgroup.co.uk/pdf/rns/2010_interim.pdf). The point which you have missed, again, is that only £23m of Admiral's profit came from motor insurance underwriting, and prior year reserve releases provided £17m of that figure. By far and away the most profitable part of their business is the selling of ancillary products. They are making hardly any money on motor insurance underwriting when compared to the overall premium written.



They already were offering direct motor policies through Swiftcover and were offering motor products through brokers, so that's not really a new entrant to the market at all, just a new method of distribution.

At the risk of now being tedious, if you have read Admirals results either you have missed the points, or you are misrepresenting them badly.
All quotes below are from
http://www.admiralgroup.co.uk/pdf/rns/2010_interim.pdf

“The Board is declaring a record interim dividend payment of 32.6p per share.
The UK car insurance business continues to be the driving force behind our success and in the first half of 2010 we shifted up yet another gear.
Confused price comparison business are not as strong.

As a result, every member of staff will receive £1,500 of free shares in the Group, worth over £6 million in total.

UK Car Insurance – Co-insurance and Reinsurance
Admiral retains a net 27.5% of UK premiums in 2010 (in line with 2009). 45% of total UK premium is underwritten by the Munich Re Group (specifically Great Lakes Reinsurance (UK) Plc) under a long-term co-insurance agreement (running until at least the end of 2016), whilst 27.5% is proportionally reinsured to Hannover Re (10.0%) New Re (10.0%) and Swiss Re (7.5%).
The nature of the co-insurance is such that 45% of all motor premium and claims for the current year accrues directly to Great Lakes and does not appear in the Group’s income statement.
Similarly, Great Lakes reimburses the Group for its proportional share of expenses incurred in acquiring and administering the motor business.
The profit commission terms in all the agreements allow Admiral to participate to a large extent in the profitability of the total underwriting, and the most recent reinsurance”


So. to explain why we don’t need to be upset by the paltry £28.3 million poor profit from underwriting, for a true picture, the profit of £28.3 million pounds is on only 27.5% of the business, as Admiral farm out the other 73.5%. So if they kept it all in house, it would be a massive £100 million +. From Admirals own figures, they made £36.9 million on top of the £28.3 million in profit commission.
So don’t send them a donation yet.

Axa are now is the direct market.
They weren’t before. You can try to put any spin on that you would like to.
Axa think it’s worth becoming a player.