1 years "no claims" discount - but no discount?

mikey72

Dangermac wrote: »

Mike72 seems to be a mouthpiece for the anti-insurance-company campaign, whilst spouting complete drivel.

Fact: Consumerism has changed the face of Car/House Insurance - probably forever. The consumer has demanded cheaper premiums and wider cover - which has been delivered - because of financial capacity in the market.

However - because profits (if they exist at all) are wafer thin, in my opinion, insurers will stick to the letter of the contract when deciding whether to pay/not pay a claim. Whereas, 20 years ago, most insurers would normally be fairly magnanomous, and would look to the 'spirit of the cover' as opposed to the cold words.

Also, now that this financial capacity in the market (i.e plenty of competition) is starting to reduce, Mikey72 and the like, seem to think that the world is against them, and that insurers are coining it in.

Fact: Yes - insurers are now charging for many things that they never (generally) used to. Do I like/agree with this. No - definately not.

However, the FSA (who govern the industry) favours specific charging for things like duplicate documents etc, because the alternative (which I personally favour) is that everyone pays a few pennies more, meaning that the insurance company can make a fair return on the initial premium. Consumerism has also led us partly down this path also.


Fact: Insurance companies do not make mega profits on car insurance. Why do you think that so many companies are either withdrawing from the market on scaling back their financial capacity.



Mikey72 - I have never come accross such one-sided (and, frankly, inaccurate) posts. I should concentrate on your day job if I was you.

I'm surprised with your usual charm you have a day job.
But you have managed to run on with no point yet again.
I'll provide the references to the profits in my links.
You keep it in balance with your opinion if you want to.

FACT insurance companies make a very large profit out of nearly every aspect of their business, but underwriting is one part of their business that is not as profitable. But all the other aspects do nicely thank you.
(read the figures, don't use your opinion as a fact if you reply though, unless you're going for the comedy response like normal)

Dangermac

mikey72 wrote: »

I'm surprised with your usual charm you have a day job.
But you have managed to run on with no point yet again.
I'll provide the references to the profits in my links.
You keep it in balance with your opinion if you want to.

FACT insurance companies make a very large profit out of nearly every aspect of their business, but underwriting is one part of their business that is not as profitable. But all the other aspects do nicely thank you.
(read the figures, don't use your opinion as a fact if you reply though, unless you're going for the comedy response like normal)

Given that you think that they make so much money, isnt it strange that so many companies are either reducing or withdrawing from motor insurance.

Dangermac

mikey72 wrote: »

I'm surprised with your usual charm you have a day job.
But you have managed to run on with no point yet again.
I'll provide the references to the profits in my links.
You keep it in balance with your opinion if you want to.

FACT insurance companies make a very large profit out of nearly every aspect of their business, but underwriting is one part of their business that is not as profitable. But all the other aspects do nicely thank you.
(read the figures, don't use your opinion as a fact if you reply though, unless you're going for the comedy response like normal)

Ah, I see. You agree that writing insurance (underwriting) - which is what insurance companies mainly do - doesnt make them any money.

However, you state that they do well from other income (presumably you mean investment income). However, what happens when there is little or no return from investments, or when the capital value of their investments depreciate (i.e property / stocks / shares)?

lisyloo

The last I heard, capitalist businesses were allowed to make money, indeed it is positively encouraged to provide both jobs, investment and growth to investors.
I would totally agree with challenging any sharp practice, breach of guidelines or illegal stuff.
The fact is all we have is a few people that don't like the business model - well tough !!

Dangermac

lisyloo wrote: »

The last I heard, capitalist businesses were allowed to make money, indeed it is positively encouraged to provide both jobs, investment and growth to investors.
I would totally agree with challenging any sharp practice, breach of guidelines or illegal stuff.
The fact is all we have is a few people that don't like the business model - well tough !!

Well said Lisyloo

newfoundglory

bouncyd!!! wrote: »

One thing the original poster has omitted to include is their age and driving experience which might mean that going forwards loadings for these factors are reduced, which will impact the premium overall.

Seems to be a lot of concentration on NCB which is not the only factor influencing pricing. Occupation and postcode also seem to have been forgotten together with vehicle use - practically impossible to comment unless all of these factors are included.

Age 26, civil servant
Driving: 1 year
SDP&C + Business use (approx. £20/year extra for all this)
Drive other cars third party (no extra cost)
Parked on drive at night.
1 non-fault accident
Cheapish insurance post code (don't live in a London borough)

It seems to me further discounts are only likely by holding license for a longer period, well I don't need a car or policy for that.

The non-fault accident loads a 12-month Admiral policy by an extra £50 for me, and prevents a lot of insurers from quoting regardless of fault.

I can halve excess from £500 to £250, which adds about £65 to a 12-month policy (better than a year ago)

mikey72

Dangermac wrote: »

Ah, I see. You agree that writing insurance (underwriting) - which is what insurance companies mainly do - doesnt make them any money.

However, you state that they do well from other income (presumably you mean investment income). However, what happens when there is little or no return from investments, or when the capital value of their investments depreciate (i.e property / stocks / shares)?

No underwriting is a very small part of their business, and makes enough money for them, I don't think they would live well on investments.
Read Admiral's report for an explanation of were all the profit comes from.

"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”

Admiral reported profit before tax at £216m for the full year ended 31 December, 7% ahead of 2008, whilst turnover rose 18% to £1.08bn.

It added its customer numbers were up 19% to 2.08 million (2008: 1.75m), profit from UK car insurance was up 15% to £207m (2008: £180m).

Confused profits were up slightly to £25.7m, (2008: £25.6m).

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, they still made £216 million overall.

mikey72

lisyloo wrote: »

The last I heard, capitalist businesses were allowed to make money, indeed it is positively encouraged to provide both jobs, investment and growth to investors.
I would totally agree with challenging any sharp practice, breach of guidelines or illegal stuff.
The fact is all we have is a few people that don't like the business model - well tough !!

At least you admit they are there to make money, and pay out to investors, and you agree we should fight their all too common sharp practice, breach of guidelines and illegal practice.

And if we have people that don't like me saying shop around, never accept auto renew, challenge any unfair practice, complain to the FOS, and ignore the insiders that are complaining that £216 million isn’t enough profit, well tough.

lisyloo

At least you admit they are there to make money, and pay out to investors

That's the primary purpose of most companies. There are a few who have moral/ethical agendas but they are in the minority.
Anyone who thinks otherwise must be living in a fantasy land.

and you agree we should fight their all too common sharp practice, breach of guidelines and illegal practice.

I wouldn't agree with the common part.
I would not hesitate to complain, but I have never personally encountered any of these problems in 23 years.
I don't know any family members that have either in fact I can honestly say my family members have had very good claims experience and I'm thinking of many claims (at least 6) over the entire family and many years.
My nephew for example wrote off a car and Direct Line allowed him to transfer his insurance on a new car despite paying out in full for the old one.
My FIL had a PI claim (a try-on) from a third party repudiated by Norwich Union.
I've had excellent service from Lloyds TSB who gave us a Saab as a hire car with £50 excess and allowed us both to drive it.
I've never had insurance renewed that I didn't want.

never accept auto renew

Fine if you are discplined (which I'm sure you are), but we are seeing too many people on here reporting their insurance ran out.

well tough

Complain as much as you want.
Ranting on here acheives absolutely nothing on it's own.

Out of interest what are you planning to do about it? (I'm genuinely interested).

Dangermac

mikey72 wrote: »

No underwriting is a very small part of their business, and makes enough money for them, I don't think they would live well on investments.
Read Admiral's report for an explanation of were all the profit comes from.

"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”

Admiral reported profit before tax at £216m for the full year ended 31 December, 7% ahead of 2008, whilst turnover rose 18% to £1.08bn.

It added its customer numbers were up 19% to 2.08 million (2008: 1.75m), profit from UK car insurance was up 15% to £207m (2008: £180m).

Confused profits were up slightly to £25.7m, (2008: £25.6m).

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, they still made £216 million overall.

Admiral are not an insurer, therefore, the information above is completely irrelavant.

Furthermore, if (as per your comments above) insurers dont make their money from:

- Underwriting (writing cover in return for premium)
- Investment

Where does their income come from?