High insurance premiums - insurance companies own goal?

thor

I've just seen that sky news have reported that there has been a significant drop in the number of young people taking up driving and the number one reason as far as I am concerned has to be the high insurance premiums that has been lumped on them.
To me it looks like insurance companies have sowed the seeds for their own demise. They are shrinking their pool of future customers by hitting them so hard. No doubt there are boy racers out there who are causing accidents left, right and centre and PERHAPS costs are going up because of it(I'm not 100% convinced though) but tarring all young drivers with the same bush will cost the insurers in the long run. Not all will bother to take up driving when they get older.

Dangermac

thor wrote: »

I've just seen that sky news have reported that there has been a significant drop in the number of young people taking up driving and the number one reason as far as I am concerned has to be the high insurance premiums that has been lumped on them.
To me it looks like insurance companies have sowed the seeds for their own demise. They are shrinking their pool of future customers by hitting them so hard. No doubt there are boy racers out there who are causing accidents left, right and centre and PERHAPS costs are going up because of it(I'm not 100% convinced though) but tarring all young drivers with the same bush will cost the insurers in the long run. Not all will bother to take up driving when they get older.

Maybe their reason not to insure young drivers or charge high premiums is a conspiracy against the young, in an evil plot to wife out future generations of drivers.....

or maybe they have a real concern that younger drivers cause more accidents than more experienced drivers, and feel that they have to charge accordingly.

The insurance market is just that - a market. Insurers are desperate for business (maybe you have seen their adverts on tv?), therefore, if one insurer thought that they could make a killing by offering cheap premiums for young drivers, do you not think that one of them would have done it by now

Bottom line is, insurers are scared of young drivers because it hurts them in the pocket, which stops them being competitive for the more profitable age ranges.

The only way to change the market significantly and quickly is to legally stop insurers underwriting on age.

DM

dunstonh

I've just seen that sky news have reported that there has been a significant drop in the number of young people taking up driving and the number one reason as far as I am concerned has to be the high insurance premiums that has been lumped on them.

Another reason could be a decline in morals and personal responsibility by them and their parents.

To me it looks like insurance companies have sowed the seeds for their own demise.

The only demise is going to be the lifestyle of the young uninsured driver who gets a criminal record when caught.

They are shrinking their pool of future customers by hitting them so hard.

Hardly. UK population keeps going up and only a small minority are law breakers.

It may come as a surprise to some young people but we all had higher premiums relative to our earnings when we were younger. It is nothing new.

System

dunstonh wrote: »

It may come as a surprise to some young people but we all had higher premiums relative to our earnings when we were younger. It is nothing new.

Yes it is. When I started driving in 1966 my insurance premium was £9 pa, about the same I think as road tax.

dunstonh

Yes it is. When I started driving in 1966 my insurance premium was £9 pa, about the same I think as road tax.

Ok, maybe going back that far it may have been. However, by the 80s it was much more in line with where it is today, relative to average earnings.

rs65

thor wrote: »

To me it looks like insurance companies have sowed the seeds for their own demise.

I wouldn't worry about them - they will just focus on other more profitable classes of insurance.

vaio

dunstonh wrote: »

Another reason could be a decline in morals and personal responsibility by them and their parents......

Yep, the country's going to the dogs but I hesitate to mention that the fastest increasing in wrong doing seems to be the financial services industry. This band of crooks seem to be spectacularly good at avoiding personal responsibility for their misdeeds too.

dunstonh wrote: »

....It may come as a surprise to some young people but we all had higher premiums relative to our earnings when we were younger. It is nothing new.

No it's not new but the "affordability" gap seems to have increased dramatically. In the '70s as a new driver with a (relatively) fast car I was paying a weeks (apprentice) wages for insurance. Fast forward 30 years and out apprentice was paying 3 months wages to insure a (relatively) slow car.

The cover I got in the '70 was way better too, It was any driver and included DOC cover that was "any vehicle" so covered cars, bikes, vans & (I presume) lorries too.

vaio

Dangermac wrote: »

........The only way to change the market significantly and quickly is to legally stop insurers underwriting on age.........

Yep, race & gender have already been ruled out, age will be next.

Although the legislature in the UK are too much in the pocket of the insurers so, like gender, the age ruling will come from Europe

dacouch

70's, 80's and early 90's TPF&T young drivers premiums were artificially low due to the "Knock for Knock" agreement which ceased circa early 90's.

Personal Injury claims were also very rare and credit hire non existent

Dangermac

vaio wrote: »

Yep, race & gender have already been ruled out, age will be next.

Although the legislature in the UK are too much in the pocket of the insurers so, like gender, the age ruling will come from Europe

That will be a brilliant idea. That way, young drivers will be easily be able to insure powerful and fast cars without having to wait until they are older.

DM

raskazz

Dangermac wrote: »

The only way to change the market significantly and quickly is to legally stop insurers underwriting on age.

DM

Or, alternatively, completely overhaul the system of driver tuition and licensing, as the current system is not properly equipping new young drivers with the right driving skills. Thus reducing risk, lowering premiums, and more importantly reducing the number of young people being killed on our roads as drivers and passengers.