Tip - Admiral - definitely don't just accept their renewal quote!

InsideInsurance

nobbysn*ts wrote: »

As to having to have cash for 750 trillion pounds, are you sure are insurers are that cash rich? 400 times the uk gdp, held by each and every insurer. And you cry 'poor'?

They buy their own (re)insurance - and those people in turn by further reinsurance and so the risk is actually spread across many organisation (and countries).

As previously said, the amount that must be held in liquid capital is calculated on what their maximum probable losses are across all their policies and does factor in what reinsurance they hold - though its not as simple as being able to reduce your capital by 50% if you reinsurance half your book away because there is a counter party credit risk that the reinsurers may go bust and so more than 50% of the capital has to be kept.

Of cause the realistic maximum probable loss from a motor accident is nothing close to £750t, from memory the highest ever was around £50m but that could well be out of date. Where you start getting into silly numbers tends to be in commercial insurance when looking at cat events that hit a multitude of policies so is fairly small fry compared to the likes of the $47b insurers paid out for Hurricane Katrina

Though risk modelling one case once did lead to possible gross losses if a 14 digit number prior to reinsurance recoveries. I left that project before the net number was calculated but it was certainly seen as a case that would break the company (and most other major insurers) even after reinsurance and most likely would result in governmental action

nobbysn*ts

InsideInsurance wrote: »

They buy their own (re)insurance - and those people in turn by further reinsurance and so the risk is actually spread across many organisation (and countries).

As previously said, the amount that must be held in liquid capital is calculated on what their maximum probable losses are across all their policies and does factor in what reinsurance they hold - though its not as simple as being able to reduce your capital by 50% if you reinsurance half your book away because there is a counter party credit risk that the reinsurers may go bust and so more than 50% of the capital has to be kept.

Of cause the realistic maximum probable loss from a motor accident is nothing close to £750t, from memory the highest ever was around £50m but that could well be out of date. Where you start getting into silly numbers tends to be in commercial insurance when looking at cat events that hit a multitude of policies so is fairly small fry compared to the likes of the $47b insurers paid out for Hurricane Katrina

Though risk modelling one case once did lead to possible gross losses if a 14 digit number prior to reinsurance recoveries. I left that project before the net number was calculated but it was certainly seen as a case that would break the company (and most other major insurers) even after reinsurance and most likely would result in governmental action

My point exactly. When talking about car insurance, as loss making, but quietly slipping in figures from the very profitable commercial market, but implying it's the same risk, to justify the prices of a completely different sector, that's when it's a shady trick as well.

shazzablue

My policy with admiral is for a multicar insurance,myself o/h and daughter.due to her age(22) quotes for just herself where expensive,admiral insured us for just over £800 in our first year.at renewal i got separate quotes,mines and o/h was £230.daughters £460.phoned admiral who had sent a renewal of nearly £900 in!.they asked me the companies who had quoted and matched the price for the separate quotes, a saving of over £200 pounds.

nobbysn*ts

My daughters 21, they quoted £400 for renewal, then simply dropped it to £360 when you told them she had a better offer. So, they're still making a good enough profit on that for them to accept the business, the extra £40 was just an attempt to take advantage if she had thought they were being fair in the first place. She knows better than to trust them though.

InsideInsurance

nobbysn*ts wrote: »

My daughters 21, they quoted £400 for renewal, then simply dropped it to £360 when you told them she had a better offer. So, they're still making a good enough profit on that for them to accept the business, the extra £40 was just an attempt to take advantage if she had thought they were being fair in the first place.

You ever buy from a travel agent? Buy a car? Buy any electronics? A computer? A TV? A bed? Furniture? Pretty much anything that costs a couple of hundred or more?

Did you really pay full list price for any of them? Didnt get anything thrown in for free?

If you did then you need to learn from your insurance experience and realise that almost every company selling big ticket items are willing to negotiate

nobbysn*ts

InsideInsurance wrote: »

You ever buy from a travel agent? Buy a car? Buy any electronics? A computer? A TV? A bed? Furniture? Pretty much anything that costs a couple of hundred or more?

Did you really pay full list price for any of them? Didnt get anything thrown in for free?

If you did then you need to learn from your insurance experience and realise that almost every company selling big ticket items are willing to negotiate

Yes, and thy still make a profit, even at a reduced price, so we agree all the 'loss' is just more spin. It's the basic dishonesty and lies that offend people, other businesses are honest about the way they work. Insurers may well think they should behave like dodgy double glazing companies, but they can't whinge when the customers treat them like dodgy double glazing companies.

InsideInsurance

nobbysn*ts wrote: »

Yes, and thy still make a profit, even at a reduced price, so we agree all the 'loss' is just more spin. It's the basic dishonesty and lies that offend people, other businesses are honest about the way they work. Insurers may well think they should behave like dodgy double glazing companies, but they can't whinge when the customers treat them like dodgy double glazing companies.

So basically what you are saying is that EVERY company is dodgy because they make a profit and can discount and still make a profit?

Welcome to capitalism

nobbysn*ts

InsideInsurance wrote: »

So basically what you are saying is that EVERY company is dodgy because they make a profit and can discount and still make a profit?

Welcome to capitalism

Nope, I'm saying insurers try to sell an image, but at their heart, they're bottom feeders with the worst of them. And it shows. And now even you finally admit they still make a profit, even with the fictitious 'first year discount' as a 'loss leader'.

InsideInsurance

nobbysn*ts wrote: »

Nope, I'm saying insurers try to sell an image, but at their heart, they're bottom feeders with the worst of them. And it shows. And now even you finally admit they still make a profit, even with the fictitious 'first year discount' as a 'loss leader'.

What image do they try and sell?

Combined ratios and insurance reporting etc are all legally prescribed things and not in the control of insurers. The exact rules vary by country but most are in the same sort of ballpark.

They make perfect sense, it tells others if the money the insurer charges for their premium, including any admin fees etc, is sufficient to cover their liabilities.

If the ratio is above 100% it means that the premium alone doesnt cover their claims and operating costs for the company. Now as said, insurers have to have investments and so they have other income streams beyond just premium but somewhat arguably investment income is more risky than premium income.

If you look at the years at the start of the credit crunch you will see that many insurance companies made both underwriting losses and company losses - some made underwriting profits but company losses because how much was written off investments and they were forced to recapitalise.

As an investor, a regulator or a customer in a country where there isnt the government protection for bust insurers you then actually knowing the insurer does charge enough and doesnt have to rely on either alternative activities like repair garages and is less at the mercy of movements in the bond markets etc can give comfort.

When buying my own insurances I've never had a call centre agent etc tell me thats as low as they can go because otherwise they'll be making a loss or saying their company's on the edge etc. They simply give a price, I say I've had cheaper, some will then cut the price and others will say its the best they can do.

Seems fairly similar to my experiences when buying anything else of an equiv price

nobbysn*ts

InsideInsurance wrote: »

What image do they try and sell?

Combined ratios and insurance reporting etc are all legally prescribed things and not in the control of insurers. The exact rules vary by country but most are in the same sort of ballpark.

They make perfect sense, it tells others if the money the insurer charges for their premium, including any admin fees etc, is sufficient to cover their liabilities.

If the ratio is above 100% it means that the premium alone doesnt cover their claims and operating costs for the company. Now as said, insurers have to have investments and so they have other income streams beyond just premium but somewhat arguably investment income is more risky than premium income.

If you look at the years at the start of the credit crunch you will see that many insurance companies made both underwriting losses and company losses - some made underwriting profits but company losses because how much was written off investments and they were forced to recapitalise.

As an investor, a regulator or a customer in a country where there isnt the government protection for bust insurers you then actually knowing the insurer does charge enough and doesnt have to rely on either alternative activities like repair garages and is less at the mercy of movements in the bond markets etc can give comfort.

When buying my own insurances I've never had a call centre agent etc tell me thats as low as they can go because otherwise they'll be making a loss or saying their company's on the edge etc. They simply give a price, I say I've had cheaper, some will then cut the price and others will say its the best they can do.

Seems fairly similar to my experiences when buying anything else of an equiv price

Again, more smoke and mirrors, 'If the ratio is above 100% it means that the premium alone doesnt cover their claims and operating costs' - operating costs including the building of assets. So having to invest capital, and putting away £750t in case of a bad claim is actually a loss, so the more business, the more revenue, the most capital, the more loss. On paper. wind the company up, there's a pot with £750t waiting to be shared out. It's like saying you made a loss this year, as you only earned £50k, but saved £60 in the bank.