Sexist Car insurance

inmypocketnottheirs

lisyloo wrote:

Yes, see post #125 from gazza



Do you know otherwise?
If so pray tell us about the massive profits they make from motor insurance and what return this represents on their investment.
Something more concrete than dots and smileys will be required to back up your point.

Oh I see, I have to agree with your point of view do I? Does post 125 give anything more concrete. As I can definately insure my car in the US than here in the UK, and has I have done the same previously in Spain and Greece, I have all the concrete evidence I require.

As this is a moneysaving site, a not a site that endeavours to justify the high premiums enforced by an insurance 'cartel' I find your attitude somewhat bemusing.

lisyloo

Oh I see, I have to agree with your point of view do I?

Absolutely not.
I don't believe there really are "points of view" about the profitability of the motor insurance industry.
There are facts and figures.

Does post 125 give anything more concrete.

In my opinion the same thing applies.
Everyone that makes a claim should be prepared to back it up with facts, figures, proper sources etc.
I will try and find some but please understand that this will be when my work schedule allows.
I would ask you again to back up yours claim that the UK motor industry (not gerenal insurance) making large profits.

s I can definately insure my car in the US than here in the UK, and has I have done the same previously in Spain and Greece, I have all the concrete evidence I require.

I thought we were aruging about PROFITS.
It's possible for someone to charge less for something but make a higher profits.
My claim (and post #125) is that the UK car industry does not make huge profits.
Yours is that they do.
The cost of car insurance relative to other countries is irrelavant to the profits in the UK.

As this is a moneysaving site, a not a site that endeavours to justify the high premiums enforced by an insurance 'cartel' I find your attitude somewhat bemusing.

Why do you think it's a "cartel"?
Can you back that up?

I don't agree that premiums are high.
As I've said mine are two figures which I think it quite cheap and others on this thread have had cheap quotes too.

My attitude is to contribute money saving tips (which I have done) and discuss issues politely (which I am doing too).
I will attempt to back up my claims by this evening (due to work schedule).
Please can you do the same.

Astaroth

The motor market for the first half of 2006 came out with a combined loss ratio of 100.4% - therefore for every £100 they received in they paid out £100.40 in operational and claims cost (ie a 40p loss per £100 written). The motor market as a whole is currently making a loss. Sure there are companies out there that are making a profit if memory serves me correct the best loss ratio was approximately 85% (so £15 profit for every £100 spent) and the worst was bout 160% (so £60 loss for every £100 written).

Before the old question of how are they still in business is asked again the answer has already been given.... a combination of living off the fat of previous years (eg late 90s) of good profits, using motor as a loss leader for the more profitable insurance like Home or for new startup companies having financial backers willing to take the hit on the promise of more lucrative years to come.


As to the other points.... I guess no one is interested in the fact that every insurer witnesses that female drivers represent a lower risk in terms of claims frequency/ cost than a male driver that is otherwise identical. You can try and argue the reasons for this... some are probably more to do with things that are not directly related to gender but factors such as males typically drive on the motorway more than females and motorway accidents (due to speeds involved) typically have higher claims costs.

Without us all having GPS systems in our cars it isnt possible however at present to rate on factors such as time of day that people drive or if they go through accident blackspots often or not. Therefore broader brush strokes have to be applied.... you live in an area where 3 out of 4 routes out are all accident blackspots you will be hit by a loaded premium even if you only use the 1 non-blackspot route. Once we all decide to allow insurers to know exactly where we go, when we go, what speed we do etc we will then have to wait for a good number of years before there is sufficient data for insurers to create a more refined rating system.

I repeat again, insurers work off statistics and not explainations.... if they found that people who worked for MacDonalds were 10x more likely to have an accident than people that worked for Burger King then MacDonalds employees would pay more without the insurers trying to work out what aspect of the MacDonalds work culture was causing the variance.

Insurance also works on the basis of the common pool.... therefore by intentionally targeting certain customer types (eg Privilege - mass-exclusive, NFU - people living in rural areas, Diamond - female drivers) they can intentionally shape the common pool which will result (on average) with lower than average premiums for those target customers. Of cause there are exceptions to this where the common pool is so big that they can realistically withstand large loss claims and so allow the pool to grow naturally and offer below average premiums to everyone.

lisyloo

Here is a report I found.
I hope the BBC is accepted as a reputable and independent source.

http://news.bbc.co.uk/1/hi/programmes/working_lunch/1593702.stm

I know this is somewhat out of date but I would draw your attention to this

The motor insurance industry has only made profit in two of the past fifteen years.

Of course this is talking about the industry as a whole and not any individual company of which I am sure there are some examples of profit.

I am not justifying anyone or anything but I am lokoing objectively at the facts and from what I can see there is no evidence of huge profits in the UK insurance industry.

I'm_With_Stupid

lisyloo wrote:

Here is a report I found.
I hope the BBC is accepted as a reputable and independent source.

http://news.bbc.co.uk/1/hi/programmes/working_lunch/1593702.stm

I know this is somewhat out of date but I would draw your attention to this



Of course this is talking about the industry as a whole and not any individual company of which I am sure there are some examples of profit.

I am not justifying anyone or anything but I am lokoing objectively at the facts and from what I can see there is no evidence of huge profits in the UK insurance industry.

Hmm, maybe the way that they determine the insurance costs aren't quite as effective as they'd have you believe? There might be quite a lot of truth in the whole cross-selling idea. I mean give someone with a 7-series BMW cheap car insurance, and use that to sell them house insurance or life insurance. Give a young person with a 1 litre Corsa a rip-off quote, and who cares. They won't want life insurance, and most of them won't own a home yet. I mean I find it hard to believe that 20 year-old Corsa owners on average actually cost the insurance companies 5 times as much as 50 year old BMW owners. More, perhaps, but not that much more.

lisyloo

Give a young person with a 1 litre Corsa a rip-off quote, and who cares.

I personally don't think this sounds realistic.
If this happened then new companies would see a niche is the market and undercut the sections of the market that are being ripped off.

give someone with a 7-series BMW cheap car insurance, and use that to sell them house insurance or life insurance.

I agree it's entirely feasible that there are "loss leaders" etc.
I recently got £55 cashback on my insurance which is almost 40% of the cost.
I doubt very much that the company will be making much profit, but they have done it in the hope that I stay with them for more than 1 year.

Of course there are these kind of marketing tricks going on.
These go on in all kinds of businesses.

For example milk/bread is often sold as a "loss leader" in supermarkets simply to draw people in.

Should this practice be made illegal because it's unfair on those that subsidise it?
Personally I think this would be taking things too far.

I totally agree that the current system is not entirely fair and it probably never will be until we all have GPS and pay-as-you-go-insurance.
Even then there will be "loss leaders" and discounts for certain groups.

To tailor quote to every individual is prohibitively expensive and is simply never going to happen.

I mean I find it hard to believe that 20 year-old Corsa owners on average actually cost the insurance companies 5 times as much as 50 year old BMW owners. More, perhaps, but not that much more.

I couldn't comment but I'm pretty sure if insurance companies were very uncompetitive in certain areas then other companies would pring up to fill the niche.
Ultimately I don't think it's feasible to have a very uneven market because of competition although I do agree that there will always be some unfairness and anomalies.

Astaroth

The high cost element to claims is predominately third party claims and not own damage. Our average claim involving third parties is about 3-4 times those involving the policyholder only - add back in operational costs and fire/ theft claims and TP claims represent approximately 2/3 of our total claims division costs.

The increased likelihood of a young driver having an accident irrespective of the value or performance of their own vehicle therefore outweighs the increased risk of a more mature customer owning a better vehicle and therefore more expensive own claims.

If you run over a pedestrian the type of car you have is going to have very little impact on the extent of their injuries and an extra £1k of repair costs for a BMW over a Corsa will be a drop in the ocean compared to the £30k of personal injury and solicitors fee costs.

I'm_With_Stupid

lisyloo wrote:

Should this practice be made illegal because it's unfair on those that subsidise it?
Personally I think this would be taking things too far.

No, I'm saying that they should not be allowed to determine anything by age or sex, only by driving behaviour and records. In the absence of any driving record, then obviously insurance will be high. So even in the system I would find acceptable, you would find that young people will still generally pay more than older drivers, because they've been driving for a shorter period of time. But older new drivers would be in the same situation too.

But this is the only industry (as far as I'm aware) where age is a factor in pricing (I know that pensioners and students get discounts, but being a pensioner or student is a state of living, not an irrelivent feature of a person). I would be equally against Tesco offering cheap milk and bread only to particular age groups, because those age groups statistically spent more in their store.

Astaroth

But Tesco do give a discount to those that spent more in their store in the form of a clubcard and higher spenders getting better additional discount vouchers in addition to their earned club card points

As we are going wildly off topic hear anyway.... by saying you dont think that insurers should use a key factor in determining the likely cost of selling a product to a customer would be akin to saying that tesco should charge a flat rate for all products of the same type so all baked beans should be 50p per tin irrespective of the cost to them (ie if they are tesco value, finest, heinz etc) and all vodka £15 a bottle and only vary depending on the size.

gazza975526570

Shoud they not rate premiums for older people higher than young for products such as Life Insurance as well then?

Even though again, statistically, the older you get the more likely you are to make a claim - ie in this instance to die? SHould therefore someone who is 20 pay the same as someone who is 80 the first time they take out life insurance for the first time?

It is rated on statistics- pure and simple.