Has the world gone mad. Adrian Flux car insurance problem

Filip

MarComMan wrote: »

Thanks Cajef. So it seems. It looks like I will be walking in a couple of weeks. Anyway, whilst I understand but disagree with terminology, the hike in price from £292 to over £1000 and with another insurer seems a little out of proportion. As I said, I was not shopping around when I made this enquiry which was separate to the issue of price, rather to clarify whether I needed to re-photograph my mini, which I do (or did) by the way.

The hike in price is pretty simple really. The bulk of Adrian flux's specialist insurers I.e for non-standard risks such as imports, classics, modified vehicles, agreed values etc have very specific underwriting criteria that flux's have to abide by. Most of them will not accept people that are unemployed (an 'unemployed marketer' is not an occupation!), therefore they are left with uncompetitive 'screen rates' to offer you.

MarComMan

Just to follow on from this thread, Adrian Flux have been in contact with me in response and have relooked at this and offered to renew at a very reasonable price. My faith in humanity is restored. Thanks AF for also restoring my faith in good customer service.

InsideInsurance

martinthebandit wrote: »

Except that the price of a TV or BMW is generally the same for everyone, the price of car insurance seems to depend on the colour of the moon and if there are 5 Wednesdays in the month so I have to agree with the OP a little (actually a lot) more transparency would be a good thing.

But the price of either of those items isnt the same for everyone. Each retailer has their own price, particularly for TVs, and may or may not be open to negotiation, particularly the car, and so it comes down to both your negotiation skills and a number of other random factors.

From a personal experience, I went to buy a new car, it was at quarter end and going to a dealership outside of my area. They offered me about 8% lower than anyone else was quoting including internet only sites. Off their own back and without me having commented on their offer they increased the discount to make it about 10% lower. Their rational afterwards was that as an out of region sale it was a bonus to them, they claim to have sold it at cost because they had little other prospects of selling the car and the way their bonus structure worked selling at cost was just enough to get their quarterly figures up to get a larger bonus.

Of cause their claim to be selling at cost and their rational for it could all be lies but then no commercial pricing is transparent.



Exactly how a rating engine works is an exceptionally guarded secret and insurers spend millions refining theirs and trying to work out their competitors. Being able to accurately price insurance both from a technical aspect and a commercial one is key to writing profitable business.

On a basic level things are transparent. Insurers exact mechanism can vary but often you start with a base premium, then for each question you ask you rate every possible answer on a scale of 0 to inf (in theory at least) with 1 meaning that it is neutral or "average". You then times the base premium by each answer and that will give you your technical premium.

So as a basic example:

Base premium: £400
Age: 50 (rating 0.8)
Postcode: WR3 7BB (rating 1.1)
Technical premium: £352

Technical premiums normally will have a floor and ceiling where lower premiums are increased to the floor and if you go through the ceiling the insurer declines to quote.

Once you have your technical premium you may want to layer on some commercial considerations (eg customer elasticity), likewise you may intentionally randomly modify the price to test elasticity and then finally you have to add on Insurance Premium Tax.

Renewals tend to have secondary floors and ceilings such that if nothing has changed on the policy and no claims made the insurer will limit the impact of (a) natural aging and (b) pricing changes over the year

marlot

When I was made redundant I found I was driving very much less, as I was spending my time finding a new job.