Direct Line Shock!

adamc260

Direct Line have never been reasonable in price for either me or my dad, yet some people I talk to say they're the cheapest every year by miles... I guess we're not their target market!

mikey72

ILW wrote: »

If he makes no claims they will make a profit.

If he has an accident they will make a loss.

This applies to any single policy.

Only applies if the company has the one customer though.
If you assume they have a lot, they'll make a profit if the amount of premiums coming in, + all their other charges and costs, exceed the amount they pay out + running costs.
So if they can afford to drop the premiums on a whim, it would appear they are set high in the first place.

ILW

mikey72 wrote: »

Only applies if the company has the one customer though.
If you assume they have a lot, they'll make a profit if the amount of premiums coming in, + all their other charges and costs, exceed the amount they pay out + running costs.
So if they can afford to drop the premiums on a whim, it would appear they are set high in the first place.

I believe that last year most companies showed a loss on motor insurance.

mikey72

ILW wrote: »

I believe that last year most companies showed a loss on motor insurance.

"I believe last year most companies showed a loss on paper on underwriting motor insurance"
may be true, (and I'd love to see proof of that nowadays across the board)
However if you consider the profits made by running an insurance business overall, they make a very good profit on the rest of the business.

I don't understand why a lot of posters have such a soft spot for insurance companies compared to other businesses.

A lot of oil companies make a loss on petrol sales through garage forecourts, but no one defends them and insist we should pay more for petrol, and then ignore the fact they make billions through all the other parts of their industry.