No fault incident which was not even claimed increasing my premiums

mikey72

paddedjohn wrote: »

Statistics show that once you have been involved in an accident, at fault or not, ............

What branch of car insurance do you work in, and have you personally seen proof of that statistic?

If so, can you provide a link to it?

InsideInsurance

Unsurprisingly the statistical analysis and subsequent pricing rules that lead from it is one of the most commercially sensitive parts of an insurers data - doubt we have too many visitors on the site that would have the authority to share such data/ analysis results with the world.

mikey72

InsideInsurance wrote: »

Unsurprisingly the statistical analysis and subsequent pricing rules that lead from it is one of the most commercially sensitive parts of an insurers data - doubt we have too many visitors on the site that would have the authority to share such data/ analysis results with the world.

But what is surprising is how many people are quite prepared to state it as an absolute fact, and considering how many of them don't work in insurance, let alone car insurance, I was just wondering how they can be so authoritive in describing such a commercially sensitive subject?

dunstonh

But what is surprising is how many people are quite prepared to state it as an absolute fact, and considering how many of them don't work in insurance, let alone car insurance, I was just wondering how they can be so authoritive in describing such a commercially sensitive subject?

I used to work at a brokers and it was known then. Other posters with a background in car insurance (current or past) say the same.

What evidence do you have to say the opposite? What are you qualifications or background to make you an expert on car insurance pricing?

ILW

pmpm wrote: »

I would disagree with this. If a person is driving in a slow moving traffic and the car in front of you suddenly stops and you stop to save your car hitting it and another car hits from behind.. how does that increase the risks of your accidents 'statistically'.

It points to the fact that you tend to drive in the sort of traffic where this type of accident happens.

mikey72

dunstonh wrote: »

I used to work at a brokers and it was known then. Other posters with a background in car insurance (current or past) say the same.

What evidence do you have to say the opposite? What are you qualifications or background to make you an expert on car insurance pricing?

That's the response I would be expecting.
So even you are repeating something you heard at a brokers, and haven't actually seen any justification for?

So, the conversation in reality is;

"Insurance is dearer because you have had an accident and are more likely to have another"

"Do you have anything to prove that is true"

"Prove it isn't, and thanks for the money"

dunstonh

So even you are repeating something you heard at a brokers, and haven't actually seen any justification for?

Explanations given which sound logical and match the pricing models. You are not going to see the actual statistics and pricing as that is commercially sensitive. There is no logical reason to believe the information given is wrong.

InsideInsurance

mikey72 wrote: »

I was just wondering how they can be so authoritive in describing such a commercially sensitive subject?

The theory isnt commercially sensitive, the actual numbers behind it are.

The last time I worked directly on motor (2 years ago) there were 3 tiers of staff:

1) Call centre operators - got a simple premium, break down was only by policy section, ipt, interest etc - were given the high level theory of insurance during training

2) Call centre support and junior underwriters - got a rating factor level breakdown so could see the impact of the answer to each question. Had indepth theory knowledge inc commercial considerations

3) Pricing/ actuaries, senior underwriters, senior management who formed the pricing committee - got a further breakdown including technical premium, operational loading and commercial adjustments

Technical premiums were based purely on statistical modelling, obviously the other two were more arbitrary.

Now, can I say that I ever saw the mathematics explicitly for the impact of a non-fault claim, no, but I can say that some of the maths they did try to show me on other work was exceptionally complex and well beyond my comprehension of modelling. The very definition of what the maths egg heads were supposed to be doing was giving a purist number.

Of cause there could be some great conspiracy going on and all the actuaries and pricing analysts could be giving false results but I'd be highly surprised.... that or I just dont know the right handshake to be let into the brotherhood.

mikey72

dunstonh wrote: »

Explanations given which sound logical and match the pricing models. You are not going to see the actual statistics and pricing as that is commercially sensitive. There is no logical reason to believe the information given is wrong.

The most logical reason seems to be because the insurer can raise the premium.
If it was a statistical fact, surely it would apply across all insurers, and they would all raise the premium. As it is, it had been stated only about 40% do.
That would suggest it was more of a marketing ploy, and an invented justification.

Similar to the artificially raised renewal premiums, which can then magically reduce simply by phoning them. If it was a real "loss making year 1 discount" surely to continue the discount year after year, and continue to loss make for the life of the customer would be a very poor commercial decision. It would however appear to suggest they are still making enough profit at the reduced premium to make it worthwhile keeping that customer.

Apart from an insurer saying "Trust me, I’ve got your best interests at heart", there's no valid reason to justify either policy, especially when the former is so hit and miss, and logically makes no sense.

mikey72

InsideInsurance wrote: »

The theory isnt commercially sensitive, the actual numbers behind it are.

The last time I worked directly on motor (2 years ago) there were 3 tiers of staff:

1) Call centre operators - got a simple premium, break down was only by policy section, ipt, interest etc - were given the high level theory of insurance during training

2) Call centre support and junior underwriters - got a rating factor level breakdown so could see the impact of the answer to each question. Had indepth theory knowledge inc commercial considerations

3) Pricing/ actuaries, senior underwriters, senior management who formed the pricing committee - got a further breakdown including technical premium, operational loading and commercial adjustments

Technical premiums were based purely on statistical modelling, obviously the other two were more arbitrary.

Now, can I say that I ever saw the mathematics explicitly for the impact of a non-fault claim, no, but I can say that some of the maths they did try to show me on other work was exceptionally complex and well beyond my comprehension of modelling. The very definition of what the maths egg heads were supposed to be doing was giving a purist number.

Of cause there could be some great conspiracy going on and all the actuaries and pricing analysts could be giving false results but I'd be highly surprised.... that or I just dont know the right handshake to be let into the brotherhood.

All of which will give you the lowest premium required to give enough to maintain the business. Added on top of that are the ways to maximise profits, and increase the technical premium to the best return, without losing the customer. A bit of spin always helps, particuarly if you can turn it into an urban myth that anyone will repeat.