Car insurance risen 25%!?

John_3:16

For your records
golf 1.9 tdi class 1business use £209 with aviva

losgiganteskid

dunstonh wrote: »

Not at all. They are relying on cross subsidy to make up that loss. Just as most retail products in many areas of retail have loss leaders.

I'm sure that if you were to suggest to an underwriter that their motor book is being used as a "loss leader" you would be taken out, tied to a post and shot.

For sure, there is an element of cross-selling other services and products related to a motor policy but historically underwriters know to a very precise amount the level of take up and "extra" revenue generated by selling ancillary products.

Your point about keen pricing in the first year to secure business and letting things slip from year 2 onwards is doubtful at best and incorrect at worst as generally with acquisition costs no money is generated within the first year or so of a new incepted policy, but retaining the client is vital for profitability generating core product profit thereafter.

It is a fact that more income can be generated from "add ons" such as Uninsured Loss Recovery etc that can be secured from the basic motor policy - that's how keen the pricing is

StevieJ

My insurance has increased 25%, I have never ever made a claim, I suppose I should check around. One question, do any of those comparison sites allow for quotes without giving out your telephone number? I don't want loads of 'do you have a minute' calls.

mikey72

losgiganteskid wrote: »

I'm sure that if you were to suggest to an underwriter that their motor book is being used as a "loss leader" you would be taken out, tied to a post and shot.................

Admiral's interim figures for 2010 (half year, not full year, so 6 months)showed they made a profit of about £23m on underwriting.
As they spread the risk, and only kept about 1/4 of the inderwriting in-house, they would have made about £100 on it if they'd kept it all.
As it was they made £36m commission from the underwriting they subcontracted. So that must have been very profitable for someone to generate that sort of payment.

dunstonh

ne question, do any of those comparison sites allow for quotes without giving out your telephone number? I don't want loads of 'do you have a minute' calls.

Most have an opt out question (that is auto selected to opt in). If you opt out then you can use your tel number.

Be wary that putting in the wrong telephone number could see less insurance companies offering cover (tel number check against surname is one of the electronic checks that is done by some companies prior to quoting)

I'm sure that if you were to suggest to an underwriter that their motor book is being used as a "loss leader" you would be taken out, tied to a post and shot.

Given that underwriters, acturies and marketing normally take it in turns to have an input on pricing, I would be very surprised that an underwriter would do that.

Your point about keen pricing in the first year to secure business and letting things slip from year 2 onwards is doubtful at best and incorrect at worst as generally with acquisition costs no money is generated within the first year or so of a new incepted policy, but retaining the client is vital for profitability generating core product profit thereafter.

How do you explain the model that exists where marketing can offer year 1 discounts at a loss and then some that continue to offer a further discount if phoned on renewal?

StevieJ

lisyloo wrote: »

On average I think they went up 30%.

Be grateful you aren't 19.

Why? those were the days

StevieJ

I ran it through Tescocompare and the cheapest quote was the Policy shop (who?) that was 50% cheaper, in fact out of 45 insurers only 2 were more expensive. Of the ones I had heard of Endsleigh, Esure, Tesco, AA and Admiral were all around 40% cheaper, the more expensive were First insurance and Autonet. I did include a named mileage which I don't know if I have this with my current insurer.
Who are the best insurers or are they pretty much homogeneous bunch?

cgray25

I'm pretty skeptical about the industry making a loss, I have to say. And regardless, I've been driving for 13 years, never had a claim, speeding fine or anything else. People are talking about prices rising in relation to risk - as mentioned, with no change in circumstances, is it fair or remotely justifiable to increase my premiums 25?

dunstonh

People are talking about prices rising in relation to risk - as mentioned, with no change in circumstances, is it fair or remotely justifiable to increase my premiums 25?

Insurance is about sharing the load over the policyholders. Whilst you may not have had a claimable event, others have.

I'm pretty skeptical about the industry making a loss

The loss is on the premium. It makes a profit on the cross sales and cross subsidy on the premium. If you remove the cross subsidy (which effectively happened two years ago when investment returns vanished), then the premiums have to compensate.

http://www.thisismoney.co.uk/insurance/car/article.html?in_article_id=521601&in_page_id=35

StevieJ

dunstonh wrote: »

The loss is on the premium. It makes a profit on the cross sales and cross subsidy on the premium. If you remove the cross subsidy (which effectively happened two years ago when investment returns vanished), then the premiums have to compensate.

http://www.thisismoney.co.uk/insurance/car/article.html?in_article_id=521601&in_page_id=35

I checked my insurance a couple of years ago and the best quote was about 10-15% below my current insurer (Direct Line), now it is 50%, then again I suppose they are now a public utility