MSE News: EU ruling could throw insurance pricing into chaos

lisyloo

Underwriter - Can you please tell me whether any exiting fixed priced contracts will be able to be raised?
e.g. I have a life insurance that I took out 11 years ago where the premiums are fixed.
Will this ruling (if it goes ahead) allow insurers to change these? where premiums are fixed? or are the insurers stuck with the price?

Sounds like to me this is going to result overall in people taking out less insurance.

lisyloo

sounds perfectly fair to me

Does it also sound fair that you'll get less from your pension even though you probably won't live as long?
Does it also sound fair that you'll have to pay more for sickness and possibly medical insurance despite the fact you don't have female "bits"?

If it does then fair play for at least being consistent.

Percy1983

lisyloo wrote: »

Does it also sound fair that you'll get less from your pension even though you probably won't live as long?
Does it also sound fair that you'll have to pay more for sickness and possibly medical insurance despite the fact you don't have female "bits"?

If it does then fair play for at least being consistent.

Can you confirm I won't live as long? its not certain (just like its not certain I will write off my car any time soon, yet I still pay like I will).

Likewise, not having female bits doesn't mean I will never have a serious illness while a women certainly will.

In short yes I am consistant, the main thing I see is the other types of insurance are optional so I can take or leave them, car insurance isn't optional (if you wish to drive of course, which is important to many peoples daily lives) to which leveling it off will affect a lot of people making life that little bit fairer.

The end of the day I am happy to squiral my money away and hope I have enough if the worse does happen, like wise if I had that option with car insurance I would have quite a lot of money stored now which could pay for quite a large claim against me, yes insurance is a type of safety net to which some gain and some lose, I am happy to live without that safety net and accept the consequences.

lisyloo

Can you confirm I won't live as long?

No of course not.

In short yes I am consistant

Well, I commend you for that.

the other types of insurance are optionales I am consistant

I don't see an annuity as optional.
Currently it's mandatory for anyone that has a pension.
You could live off benefits or refuse to accept the tax free benefits of pension but that's akin to me arguing that you could live without a car.

The end of the day I am happy to squiral my money away and hope I have enough if the worse does happen,

I am very much "pro" self-insurance, but there are always things we can't afford (like house burnign down etc.).

which could pay for quite a large claim against me

hmm.......depends what you mean by large. Gary Harts claim was reoprted to be up to £50m. Remeber if you knock someone over you could be paying millions for a lifetime of care, so we are not just talking about your car here.

I am happy to live without that safety net and accept the consequences.

As I said I'm very "pro" self-insurance. But for things I cannot afford then it's clearly a risk. For example I would want buildings insurance in case my house burnt down as it's too big a risk, but on a lot of other things I would agree, although it does depend on circumstances.
Someone with a family might take a different view to risk than someone single for example.
I don't have any dependents so like you there are a number of risks I'm happy to take but I'd change my opinion if I had young children.

Underwriter

lisyloo wrote: »

Underwriter - Can you please tell me whether any exiting fixed priced contracts will be able to be raised?
e.g. I have a life insurance that I took out 11 years ago where the premiums are fixed.
Will this ruling (if it goes ahead) allow insurers to change these? where premiums are fixed? or are the insurers stuck with the price?

Sounds like to me this is going to result overall in people taking out less insurance.

There is no intention of us doing anything with existing premiums unless there is a legal reason why we have to. I can't imagine it happeneing although I never imagined such a daft situation would have arisen in the first place!

We are prepared for some kind of ruling over existing business and whether this would have to be applied retrospecitvely. Certainly Kokott said in her original opinion document that no one should remain disadvantaged by being forced to pay higher premiums than they had to - but I don't think the silly woman realised that her argument was going to result in everyone's premiums going up.

So - in my opinion no they won't change, unless the law forces us to act retrospectively, in which case we will have no choice.

It's going to cost billions...and who will end up paying??

lisyloo

It's going to cost billions...and who will end up paying??

I think the main losers are going to be the insurance industry and a relatively small number of uninsured individuals who decide not to take insurance and have claimable events.
I think a lot of people will cut back their insurance. In some cases this might not be desireable and it might be ill advised, but I think it's going to be what happens. If people are squeezed further it's inevitable.

Underwriter

Exactly lisyloo; it's a disaster for everyone. The case was initially brought by two individuals in Belgium who took it to Kokott. I wonder if they had any idea of the chaos they would cause. Conservative estimates are that so far it's cost us £35 billion in the UK alone...this will be passed on to the premium payers eventually.

I've decided that we should undergo sex changes so we are all the same gender, that should keep her quiet. :rotfl:

Percy1983

By all means I see the point of I could run somebody over and end up costing a fortune, but the odds are on my side that won't happen.

My point about other insurance being optional does go with the point of self insuring, if I think health insurance is too much as I am not female then I can choose not to take it. Where as choosing not to insure my car because I am male isn't choice.

lisyloo

By all means I see the point of I could run somebody over and end up costing a fortune, but the odds are on my side that won't happen.

Yes me too. I'm a good driver too (as are most of the population :-)
The point is that this is why it's mandatory. Simply because you could cause serious damage to someone else.

My point about other insurance being optional does go with the point of self insuring, if I think health insurance is too much as I am not female then I can choose not to take it. Where as choosing not to insure my car because I am male isn't choice.

Agreed.
And my point is that an annuity is similar to car insurance in that it is NOT optional (currently).
(well only to the same degree that car insurance is optional i.e. you don't have to have a car and you don't have to have a pension either but to many people it's essential for a decent quality of life, so to most people it's mandatory to the same extent).
All I'm saying is that it works both ways, but I accept and commend your consistency.

OshayAway

Underwriter wrote: »

There is no intention of us doing anything with existing premiums unless there is a legal reason why we have to.(

What about reviewable (not renewable) critical illness cover?