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Insurers not getting their way, boo hoo
OnanTheBarbarian
Posts: 1,500 Forumite
http://www.bbc.co.uk/news/business-29339753
The insurers are today upset about the decision of the Competition and Markets Authority telling them to get their house in order regarding pricing structures on the price comparison sites as well as more transparency over the sale of "add-on" products. Yet at the same time the CMA has advised that changes to the way the replacement "credit hire" industry operate are not needed at this time.
It would be a rare occasion if the insurance industry actually approached these debates with some actual transparency of their overall involvement in the non-fault replacement vehicle industry, instead of just trying to instil fear in people with threats of price hikes on insurance.
They moan about the cost of expensive hire cars etc, yet they created the problem all by themselves.
They stopped providing "courtesy cars" as part of standard cover, so their approved garages did not have to keep a stock of such vehicles ready for use at their own expense, but in return for this, the insurers hammered down the hourly labour rate for their repair work- so saved money which no doubt did not get passed onto consumers. They make money by selling an "upgrade" of added-on "guaranteed courtesy car cover" at usually £15 per annum to their policyholders.
However, the biggest problems for insurers is they are simply unable to distance themselves from the "credit hire" saga. Insurers fuel this whole industry by themselves as they inject the most motorists to these "expensive hire cars "simply by adopting the notion of cutting each other's throat, i.e. it is alright when it is their customer who is the non-fault party, they are happy to pass on the customer to all the trappings of credit hire etc, yet they squeal like pigs when they are on the receiving end of such charges as the fault party insurer.
The insurers are today upset about the decision of the Competition and Markets Authority telling them to get their house in order regarding pricing structures on the price comparison sites as well as more transparency over the sale of "add-on" products. Yet at the same time the CMA has advised that changes to the way the replacement "credit hire" industry operate are not needed at this time.
It would be a rare occasion if the insurance industry actually approached these debates with some actual transparency of their overall involvement in the non-fault replacement vehicle industry, instead of just trying to instil fear in people with threats of price hikes on insurance.
They moan about the cost of expensive hire cars etc, yet they created the problem all by themselves.
They stopped providing "courtesy cars" as part of standard cover, so their approved garages did not have to keep a stock of such vehicles ready for use at their own expense, but in return for this, the insurers hammered down the hourly labour rate for their repair work- so saved money which no doubt did not get passed onto consumers. They make money by selling an "upgrade" of added-on "guaranteed courtesy car cover" at usually £15 per annum to their policyholders.
However, the biggest problems for insurers is they are simply unable to distance themselves from the "credit hire" saga. Insurers fuel this whole industry by themselves as they inject the most motorists to these "expensive hire cars "simply by adopting the notion of cutting each other's throat, i.e. it is alright when it is their customer who is the non-fault party, they are happy to pass on the customer to all the trappings of credit hire etc, yet they squeal like pigs when they are on the receiving end of such charges as the fault party insurer.
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OnanTheBarbarian wrote: »http://www.bbc.co.uk/news/business-29339753
The insurers are today upset about the decision of the Competition and Markets Authority telling them to get their house in order regarding pricing structures on the price comparison sites as well as more transparency over the sale of "add-on" products. Yet at the same time the CMA has advised that changes to the way the replacement "credit hire" industry operate are not needed at this time.
A slight mis-representation there? The ABI have actually welcomed these changes. The restrictions on Insurers being able to offer different prices across the various comparison sites was not imposed by the Insurers but by the comparison sites themselves. So the reality is that the lack of competition mentioned in the article is caused by the comparison sites themselves.
It is a similar story with the reductions in cover that you mention, the growth of the comparison sites has driven personal insurance products purely down the "cheapest at all costs" route.
I can't argue with your view of the whole credit hire situation though.All matter is merely energy condensed to a slow vibration, we are all one consciousness experiencing itself subjectively, there is no such thing as death, life is only a dream, and we are the imagination of ourselves.0 -
Some insurance company directors are saying it hasn't gone far enough.
http://www.insurancetimes.co.uk/cma-probe-industry-reaction/1410046.article
In the article you've linked to the ABI say it doesn't go far enough too. There are no quotes in the BBC article suggesting insurers are complaining about sorting these things out.
But why let facts get in the way of an anti-insurance rant eh?0 -
The price comparison sites are also largely insurer or intermediary owned, so again I don't see why they are happy about these changes. Probably because it will make no real difference to their profits.
The ABI said
"Consumers need relevant and clear information to make an informed choice about the add-on products they are buying, and we are already working with the Financial Conduct Authority in this area.” -
Yeah they are working with the FCA on this after getting a proper telling off, not voluntarily.0 -
It will come as no surprise to anyone to learn that the real reason behind your thread isn't your irrelevant rant in the OP, but just another cynical attempt to bring up your vested interest!OnanTheBarbarian wrote: »
......The ABI said
"Consumers need relevant and clear information to make an informed choice about the add-on products they are buying, .....
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On the contrary Quentin, I was aiming at the hypocritical stance of the insurance industry taken towards the credit hire industry, whereby they continue to feed the monster they are complaining about. Much like they have done with personal injury claims, whilst at the same time buying law firms......
Back in your cage.0 -
Maybe that's because once some insurers start doing it the others had to either follow suit or cost themselves a lot of money.
Insurers welcome the stepping in and doesn't go far enough, I'm not sure how in your head that gets to insurers being upset over it.
Two possibilities here, either some big global conspiracy which everyone except you is in on or you don't fully understand the dynamics. I know which I think is more likely.
While the majority of Price Comparison Websites are owned by insurance intermediaries (not so much insurers) only a couple of firms have an ownership in a Price Comparison Website. Insurers are a bit bored of not being able to reflect the relative cost of doing business with the Price Comparison Websites in the premium offered as they have to offer the same price on all due to "Most Favoured Nation" clauses.
This now hopefully may give a bit of competition on price (to insurers) between comparison sites as to who can give the most competitive offering. It seems strange that they don't want to compete on price when that is how they encourage customers to compare insurance propositions. Reduced cost to insurers should hopefully mean reduced premiums as with the market being so competitive anyone who can reduce their prices writes a lot more business.0 -
Never heard of "cant beat them, join them"?
A number of big insurers did try to take on the credit hire companies when they were in their infancy and indeed did drive some under by refusing/ delaying payments even after court orders but ultimately a few companies with deeper pockets got into the game and so the beast was created.
As an insurer you have to be realistic, ambulance chasers, accident repair centres and even GPs are in on the game and its fairly unrealistic to say that if an insurer hadnt referred the TP to credit hire that they probably wouldnt have taken credit hire.
So, the courts have said these costs are legitimate, your going to be wacked with a big bill from these companies, do you let the no win no fee ambulance boys get the referral fees or get them yourselves?
The number of insurers that would be worse off if all credit hire was scrapped would be tiny.
Its not uncommon in business or personal life for people to object to having to pay something but given they have to then make as much revenue/ cashback as you can from it. Theres a reason my QuidCo account does so well at insurance renewal season0 -
OnanTheBarbarian wrote: »Much like they have done with personal injury claims
Does somebody need a hug?0 -
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