Insurance Admin costs

lisyloo

I honestly don't see why it's worse.
It seems fairer to me to apportion the costs to those using the services than to spread the cost across everybody.

Obviously there are some limits to that (like toilets on planes).

If you want a good laugh try this (it's a bit slow to get going so stick with it).
http://www.youtube.com/watch?v=ZAg0lUYHHFc

mikey72

For much the same reason as their response to a claim is similar to Ryanairs response to a cancellation. It's not just cost, buying insurance shouldn't feel like buying a £1 ticket on a budget airline.

Bandageman

Based on the fact that the person in the call centre will be on minimum wage = £6 per hour, everything is electronic & computerised, so a 2-3 minute call to cancel or amend a policy = 20p-30p for the worker in terms of time to process the amedment or cancel the policy. Then add in the person putting paperwork into an envelope, probably still on minimum wage. this still leaves a good £30 to cover electric ect, all for a 2-3 min call, to me thats excessive.

I feel this may stir things up a bit LOL. But i still say £15 in this modern time of electronic email ect is a more balanced admin cost.

dunstonh

Based on the fact that the person in the call centre will be on minimum wage = £6 per hour, everything is electronic & computerised, so a 2-3 minute call to cancel or amend a policy = 20p-30p for the worker in terms of time to process the amedment or cancel the policy. Then add in the person putting paperwork into an envelope, probably still on minimum wage. this still leaves a good £30 to cover electric ect, all for a 2-3 min call, to me thats excessive.

You have missed a whole range of costs and have made some incorrect assumptions.

I feel this may stir things up a bit LOL.

Not really. You don't understand the costs, requirements and the business model. You are looking at it without knowing these things and making assumptions.

Brize

dunstonh wrote: »

They are a result of the consumer demand for quote portals. The focus of which is almost totally based on getting the lowest possible price for the annual premium. So, the bolting on of add on charges and ancillary options is a consequence of that.

A very astute point.

dzug1

Bandageman wrote: »

Based on the fact that the person in the call centre will be on minimum wage = £6 per hour, everything is electronic & computerised, so a 2-3 minute call to cancel or amend a policy = 20p-30p for the worker in terms of time to process the amedment or cancel the policy. Then add in the person putting paperwork into an envelope, probably still on minimum wage. this still leaves a good £30 to cover electric ect, all for a 2-3 min call, to me thats excessive.

I feel this may stir things up a bit LOL. But i still say £15 in this modern time of electronic email ect is a more balanced admin cost.

You seem to have a very narrow view of 'costs' and have only specified marginal costs and even there probably underestimated them by a considerable margin.

Have you never heard of overheads? There is a need for extra staff, accommodation, computers, etc, over and above what would be needed if this type of admin were unnecessary. Who should pay that cost?

foggytown

dunstonh wrote: »

You have missed a whole range of costs and have made some incorrect assumptions.


Not really. You don't understand the costs, requirements and the business model. You are looking at it without knowing these things and making assumptions.

Then we await your learned explanation.

The fact is that there is some wonderful naivete being displayed on this point. Virtually EVERY business has unusual or extraordinary costs associated with a minority of its customers. But those extra costs get wrapped into the overall cost of doing business. The fact that menu pricing can be included in a "business model" doesn't necessarily make it fair.

We're talking about insurance, here. If you object to sharing the costs associated with only some policyholders, why not take your principle to its logical end and object to sharing the costs of losses to only some customers as well?

losgiganteskid

lisyloo wrote: »

It seems fairer to me to apportion the costs to those using the services than to spread the cost across everybody.

You seem to have overlooked the fact that insurance is exactly that - spreading the cost across everybody !!

losgiganteskid

dunstonh wrote: »

You have missed a whole range of costs and have made some incorrect assumptions.


Not really. You don't understand the costs, requirements and the business model. You are looking at it without knowing these things and making assumptions.

The business model to which you refer and the costs attached thereto are operational and in force at the time the insurer wishes to offer the motorist a "new business quotation" (in the hope they may secure the business) - but the insurer doesn't charge for quotations now do they ??

In other words the admin charges only apply when the insurer is able to enforce them ie - when they convert the enquiry to a contract - from thereonin the have gottcha !

pborojon

losgiganteskid wrote: »

The business model to which you refer and the costs attached thereto are operational and in force at the time the insurer wishes to offer the motorist a "new business quotation" (in the hope they may secure the business) - but the insurer doesn't charge for quotations now do they ??

In other words the admin charges only apply when the insurer is able to enforce them ie - when they convert the enquiry to a contract - from thereonin the have gottcha !

Surely the charges only apply once the proposer has accepted the quotation along with the terms and conditions? The insurer can't force anyone to take out a contract with them.