Want to know the REAL reason why your car insurance premium has gone up??

Heliflyguy

JQ. wrote: »

Firstly, car insurance is provided at cost, well it's actually worse than that, the insurance companies run it at a loss.

Thats odd because thats not the impression Admirals CEO was giving a year ago, he stated that UK car insurance business remained "central to our success", producing a pre-tax profit £206.9m.

http://news.bbc.co.uk/1/hi/wales/south_east/8544715.stm

cyclonebri1

JQ. wrote: »

Firstly, car insurance is provided at cost, well it's actually worse than that, the insurance companies run it at a loss.

Please go back to planet zoarog:wall::wall:

mikey72

There are quite a few myths and a lot of misinformation about car insurance.

Admiral make a tidy profit from it as the figures they publish show.
The CEO was happy anyway
"The big success was the UK motor insurance business. It's a snowball going like a freight train. Downhill. Wow! "

Employee Share Scheme – shares, in total worth over £12 million will be distributed to over 3,500 staff based on the 2010 result

Even better than the record year of 2009, they only got £9 million between them then.


The insurers get a healthy referral fee for injury claims.
The insurers also get a healthy referral fee for credit hire cars, and the fee is proportional to the car and the period of hire.

mikey72

JQ. wrote: »

Firstly, car insurance is provided at cost, well it's actually worse than that, the insurance companies run it at a loss....

http://www.admiralgroup.co.uk/press/pressreleases/02_03_11.php

Well, Admiral, who are only in car insurance appear to disagree with you, but by all means put up the links to show the losses, because no one else, even those in car insurance, can actually find them.
But I do read it reguarly, so the information, (or mis-information), must be somewhere.

atrixblue.-MFR-.

JQ. wrote: »

Firstly, car insurance is provided at cost, well it's actually worse than that, the insurance companies run it at a loss.

Secondly - can you imagine if our government got involved - there'd be 25 layers of beaurocrats involved at a cost of billions. There's absolutely no way the costs would go down.

Thirdly - it's very simple to solve - there should just be a complete overhall of the car insurance system - Banning accident management companies, no win no fee solicitors and all the rest of the leeches

if this was true thered be no insurance company theid all go bust especially with recesion.

i think the insurers need to be monitored, if thats by a goverment body so beit, the insurers wont like to pay the goverment anything other than what they have to, so if a system was inplace that in the event the insurers hiking prices for no good reason or price fixing, then fines would reign in on them that cannot be passed to the motorist i think things would be different.

i thought handing any personal information to other companies other than inhouse was breach of DP, i would be really unhappy that a insurers gave anyone my telephone number name and addy to any claims managment solicitors without my express written permission, we often opt out of the marketing claus online in a way this is marketing for profit what they do.

those staged accident are getting worse, and ive also known that some accident repair shops will batter and bend your vehicle under their care to UP the price of repair that means they get a bigger chunk of cash.

i know someone who went up the backside of a megane (genuin accident) but because there was minial damage from the tap between them and the guy wasnt happy there was a possible repair he brought it home and smashed it into his garage wall to do more damage so it would be a cat c or D write off, they gave him the cash and he had the car back and repaired it sold it private and made a stupid profit on it, he also got found not at fault because the fella he hit was on his own (so was the the person i know) the fella had no whitnesses so guy i know paid £100 to get someone to be a whitness in his favour, and got him to say the guy rolled back and hit the car.

rev_henry

If Admiral, one of THE cheapest insurers IMO, are making a fortune out of insuring me (a 19 year old) for £600, I dread to think what all the other companies are making.

Lum

jazzy wrote: »

What gets me with most repair companies is that they charge more if the work is being done through an insurance company. Very often I have been given a cheaper quote if the work is done privately.

My local bodyshop do this and I can't say I blame them.

The manager there also works on the cars, and the amount of hassle and wasted time he has to put up with when dealing with an insurance company takes up a significant chunk of his day. That's hours where he could be out in his overalls working on customer vehicles making money.

You can't charge for those hours, only for labour. Nor can you charge for storing a customer vehicle for three weeks while the insurance faff around getting out an assessor and an engineers report and deciding whether to approve the repair or not.

So instead they raise the base labour rate to compensate for these costs.

JQ.

http://uk.reuters.com/article/2010/11/02/uk-insurance-cars-britain-idUKTRE6A100E20101102
Britain's car insurance sector will return to profitability in 2011 after two years of steep losses, provided it can push through more price rises without losing customers, accountants Deloitte said on Tuesday.
Motor insurers, hit by soaring claims due to the growing influence of "no win, no fee" lawyers, are set for a collective loss of 1 billion pounds this year, after a record 1.6 billion deficit in 2009, Deloitte said.
But the sector will swing back into the black next year provided it can sustain a steady rise in car insurance prices that began in late 2009, Deloitte added.
"Without the support of prior year reserve releases, the only way the industry will return to profit is with sustained rate increases through to 2011," said Deloitte insurance partner Ian Clark.


And to quote Admiral's own Annual Report :
"Whilst, Admiral's UK results have been consistently profitable for some time, the UK private motor market as a whole remains significantly loss making."

So fair enough Admiral are doing very well in a poor market however - off premiums of £939.1m Admiral made pre-tax profits of £30.1 from underwriting car insurance. The rest of the profit came from other sources. So of their £215.8m pre-tax profits only 14% came from actually insuring cars. Not exactly earth shattering.

mikey72

JQ. wrote: »

http://uk.reuters.com/article/2010/11/02/uk-insurance-cars-britain-idUKTRE6A100E20101102
Britain's car insurance sector will return to profitability in 2011 after two years of steep losses, provided it can push through more price rises without losing customers, accountants Deloitte said on Tuesday.
Motor insurers, hit by soaring claims due to the growing influence of "no win, no fee" lawyers, are set for a collective loss of 1 billion pounds this year, after a record 1.6 billion deficit in 2009, Deloitte said.
But the sector will swing back into the black next year provided it can sustain a steady rise in car insurance prices that began in late 2009, Deloitte added.
"Without the support of prior year reserve releases, the only way the industry will return to profit is with sustained rate increases through to 2011," said Deloitte insurance partner Ian Clark.


And to quote Admiral's own Annual Report :
"Whilst, Admiral's UK results have been consistently profitable for some time, the UK private motor market as a whole remains significantly loss making."

So fair enough Admiral are doing very well in a poor market however - off premiums of £939.1m Admiral made pre-tax profits of £30.1 from underwriting car insurance. The rest of the profit came from other sources. So of their £215.8m pre-tax profits only 14% came from actually insuring cars. Not exactly earth shattering.

Considering they actually retain less 27.5% of their underwriting, and re-insure the rest, it makes the pro rata profit from underwriting alone about £120 million.
In fact Admiral received commission of £36 million on the premium they re-insured in the first half of 2010, so the underwriters made enough to pay Admiral that, and still make enough to make it worthwhile.
So yes, underwriting appears to be extremely profitable.

(And I think in the interest of pointing out more spin and mis-information, unless you can show me the link, Admiral said that in 2009, 2 years ago, so not really relevant to the record profits and premiums now)

Why can Admiral make a profit, whereas other complacent insurers are happy just to pay out, make a "loss" on underwriting, complain, and then remedy it by simply stating they have to charge more? Why should the customer pay for mis-management?

And what is the selective focus on underwriting. I pay a premium for insurance, not underwriting.
If you buy an apple from Tesco's, you pay for the apple. Tesco make a profit on the apple as a product. If they make a loss on the packaging process, I don't agree to pay them more to cover it. They make enough on the rest of the product.

But really the final question is,
do we believe a news article by a firm of accountants on a Reuters website, using data that no-one has seen, and could be carefully selected to be "statistically" accurate, but only a small part of the product, or do we believe the actual results published at the year end by a car insurer dancing for joy after yet another record year?

Kilty_2

daveyjp wrote: »

First call was from a credit hire company - equivalent car would be provided - cost? £100 a day for an Aygo!

I know these prices are regulated however how are they still getting away with charging about 4x what I can hire an Aygo or equivalent for? :eek: