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Admiral to be Admired?
Comments
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A few points on Admiral and where they derive their profits:
1) Admiral's pricing is advanced. Unlike some other insurers who seem to attempt to cherry-pick risks but end up chasing down premiums to £200 or less in certain areas, on the whole they target higher than average premium business - your £400+ premiums. They are able to do this through ownership of confused.com which gives them much better access to volumes of market data. Ownership of confused.com also gives them much better data on which to combat underwriting fraud e.g. prevention of "quote massaging". I also suspect that they implement what is termed "Real time pricing" on their aggregator which adjusts the premiums they quote depending on where the rest of the market are - I'm not sure this is to the spirit or the letter of anti-competition law but there you go.
2) As others have pointed out, they are aggressive on claims of all forms, not just accidental damage, fire and theft. They have perhaps not been as disrupted by recent increases in propensity to claim for personal injury as a few years ago they were a much smaller insurer specialising in fairly high risk areas eg young drivers.
3) A susbstantial portion of profit for Admiral derives from mysteriously-named "non underwriting activities". In 2010 "ancillary income per vehicle" (this could be legal expenses cover, personal accident cover, breakdown cover but also includes plenty of referral fees) was £77. Over half their profits (£142.4 million) derives from "ancillary income". This is not underwriting profit.
4) Their expense ratio is low compared to the market but not below what one would expect for a such a large direct insurer who operates mainly in the internet space
They are pretty much the only UK private motor insurer which is currently profitable. There are quite a few simple-minded people on here who assume that because Admiral make a profit, either:
(i) Motor insurance must be profitable for all insurers, or
(ii) If only all other insurers worked in the same way Admiral does, they would make a profit and premiums would not be increasing as much.
These are not sound assumptions.
(i) Motor insurance is not a profitable market and has not been for some years. This is quite clearly evidenced by information in the public domain.
(ii) As I described above, there are fundamental differences between Admiral and most of the rest of the market. For example, Admiral does not compete in the £200 premum segment and so what is required by the market to make a profit in that area is rate increases, not some nebulous change to an Admiral operating model.
Having said all that, there are market analysts out there who simply do not believe that Admiral are as profitable as they proclaim to be. I guess time will tell on that one.0 -
Read above
Had a lot of friends on the ADL teams and would often hear the targets set to them... not saying everyone has their claim settled in that way but a lot would.
As mentioned, if that is true then that is a serious and systemic breach of TCF and should be reported to the FSA.0 -
There are quite a few simple-minded people on here who assume that because Admiral make a profit, either:
(i) Motor insurance must be profitable for all insurers, or
(ii) If only all other insurers worked in the same way Admiral does, they would make a profit and premiums would not be increasing as much.
These are not sound assumptions.
(i) Motor insurance is not a profitable market and has not been for some years. This is quite clearly evidenced by information in the public domain.
(ii) As I described above, there are fundamental differences between Admiral and most of the rest of the market. For example, Admiral does not compete in the £200 premum segment and so what is required by the market to make a profit in that area is rate increases, not some nebulous change to an Admiral operating model.
Having said all that, there are market analysts out there who simply do not believe that Admiral are as profitable as they proclaim to be. I guess time will tell on that one.
If you need to resort to abuse at nearly every turn now, maybe you need to have arest from posting on here, and get your stress down.
Is it yourself, or the "analysts" who are saying the figures published by Admiral are false, and you saying the accoutants who approve are the figures have been somehow got to?
If you do have proof of that, I agree that should be made public by you, if as you claim all the year end figures are falsified and their model really doesn't work and return such good profits and bonuses.
Is your arguement for Admiral making a profit that they go for high risk, more expensive premiums, and that's where the profit is, and that the low risk, cheaper end premium is loss making?
Isn't that the opposite of what you normally argue when you justify increasing the premium for high risk drivers, as you argue that's where the most is paid out, and no one can make a profit there?
You can have extra points if you can manage to leave the abuse out of your response for a change as well.0 -
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If you need to resort to abuse at nearly every turn now, maybe you need to have arest from posting on here, and get your stress down.
I'm not stressed at all. People who do not think logically or bother to examine evidence before posting are simple-minded in my opinion so I will not apologise for using that terminology. Also note that I was not referring to anyone personally there.Is it yourself, or the "analysts" who are saying the figures published by Admiral are false, and you saying the accoutants who approve are the figures have been somehow got to?
If you do have proof of that, I agree that should be made public by you, if as you claim all the year end figures are falsified and their model really doesn't work and return such good profits and bonuses.
Myself, I would say that I retain a healthy scepticism where Admiral are concerned. I have no "proof" either way, that is just my gut instinct based on what I do know about the motor insurance market. They undoubtedly hold a strong competitive advantage in certain areas, as per my post above. However, analsyts have been somewhat bemused by Admiral's reported results - as one put it "they seem to defy gravity".
Please do not put words into my mouth. I never claimed that "all the year end figures are falsified" at all. If their reported profitability was not correct then it would not necessarily be an issue of "falsification" either - it could just as easily be poor claim reserving which has certainly befallen a lot of other motor insurers recently.Is your arguement for Admiral making a profit that they go for high risk, more expensive premiums, and that's where the profit is, and that the low risk, cheaper end premium is loss making?
Isn't that the opposite of what you normally argue when you justify increasing the premium for high risk drivers, as you argue that's where the most is paid out, and no one can make a profit there?
Not at all. Admiral do not blindly jump after higher premiums. What they do do well is segment the market carefully so that they are obtaining higher than average premiums but only where that premium reflects a profit.
You have to remember that what matters in terms of motor underwriting is not "high" or "low" risk - it is what the risk IS and whether the insurer can charge a premium which not only covers that risk but will also provide a profit. That is where in this day and age a profitable insurer has to have a very sound "technical" rating process to work out what the risk is, but also a sound method to compare this to the market rate so they know where they can pick up profitable business.0 -
You will find that within any claims department, being told to settle claims as low as possible. It's not unique to admiral, although heavily enforced.
Yes of course claims departments are tasked with minimising claims costs but they should be doing this by fair means.
If it what you posted earlier were true:adamc260 wrote:Accidental loss departments are targeted to settle total loss/stolen car payouts BELOW bottom book
Then that would be a systemic breach of TCF and would be a very serious matter.0 -
Peter_Piper_picked wrote: »Ah, nothing like a good debate...
Did anyone do any research or do they feel they have no need to?
research into what0 -
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