MSE News: Car insurance cost hope after fees ban

fordy

I know that's a naive point of view. But its a self serving greed machine.

InsideInsurance

fordy wrote: »

if something is required by law, surely it shouldn't be run at a profit, right?

Historically things run for profit and therefore having competitive market are generally cheaper than nationalised services because market pressures forces organisations to look for cost reductions etc.

BackOnTrack

I predict that car isnurance costs will continue to go up as before with the only difference being an increase in insurance companies profits.

fordy

InsideInsurance wrote: »

Historically things run for profit and therefore having competitive market are generally cheaper than nationalised services because market pressures forces organisations to look for cost reductions etc.

What went wrong then?

mikey72

fordy wrote: »

What went wrong then?

Bonuses, institutional shareholders, and creative accounting.

InsideInsurance

fordy wrote: »

What went wrong then?

Arguably nothing, car insurers are still making a loss.

Claims costs are currently increasing at over 10% per year due to a host of reasons but most notably the increase in personal injury claims and particularly those that go down the conditional funding route (aka no win no fee) and credit hire.

If you can reduce the car insurers costs by introducing legislation to limit how much claims is now costing them then you'll undoubtedly see prices come down (netting off inflationary factors obviously).... there aren't many industries that are willing to run at a loss for the best part of a decade.

mikey72

InsideInsurance wrote: »

Arguably nothing, car insurers are still making a loss.

Claims costs are currently increasing at over 10% per year due to a host of reasons but most notably the increase in personal injury claims and particularly those that go down the conditional funding route (aka no win no fee) and credit hire.

If you can reduce the car insurers costs by introducing legislation to limit how much claims is now costing them then you'll undoubtedly see prices come down (netting off inflationary factors obviously).... there aren't many industries that are willing to run at a loss for the best part of a decade.

There aren't many making enough money to run "at a loss" for ten years.
Seems strange they can afford to really.

InsideInsurance

mikey72 wrote: »

There aren't many making enough money to run "at a loss" for ten years.
Seems strange they can afford to really.

Same old same old.... most write lots of other classes of insurance which are profitable. Motor is for some a loss leader and for others you have the complexities that they are owned by banks and so having a cash business is very useful and the losses of a product can be offset by the earnings of the non-cash business it affords them to have.

mikey72

InsideInsurance wrote: »

Same old same old.....

Just what I was thinking.
"Underwriting losses" as a buzz word, whilst glossing over extremely good overall busines profits again.

fordy

wonder what the government's cut is?