Tried to add my wife - refused

dunstonh

.Why is it they increase each year, lose a customer, even though the customer has shown they are lower risk?

Why do broadband companies offer discounts in year one? Why do utlities offer discounts in year one? Why does sky offer discounts in year one?

Year one discounting is a marketing model. They discount is either partly or fully removed at renewal.

but it's a bizarre business model at face value.

Largely driven by comparison sites and the need to get near the top.

There is no sound reason to consider someone higher risk, when the duration of them clear of any claims or convictions, increases by one year.

The vehicle is not mainstream. That increases the risk. A recently passed learner driving an SUV is very high risk. One risk may not be enough to tip you over into the rejection stage but several mounting up can do. Or it could just be their policy not to have new recently passed drivers.

It also makes zero logical sense, that insurance companies using the latest big data crunching tools, would statically compute risk so differently, that one prices at £250 and the other at £1200.

Target markets and type of insured individuals on their books. Are they focusing vauxhall drivers? Over 50s? high performance? Rural? City? etc etc. Is it better for the insurer to have 10,000 in one risk category or one person in that risk category. Stop looking at this as if its just you. Look at is on a wider scale. You are just a statistic that is risk rated. It doesnt mean you are going to suffer those claimable events. Just that you are more likely to in the eyes of the insurer.

iainscomputer

sebadee wrote: »

I should have worded it as 'needs more regulation'.

I honestly don't believe they quote largely on risk. Insurance companies are well known now for hiking prices on renew. I have had this for years. I have clean record, another years no claims bonus and yet they hike the price up by a few hundred pounds. I even wonder if NCB has any value at all now. They do this in the hope of someone just letting an auto-renew trigger and charge at a vastly higher sum.

I work as a software engineer, not in insurance, but in fintech (statistical data processing), so number crunching is my bread and butter. There is no sound reason to consider someone higher risk, when the duration of them clear of any claims or convictions, increases by one year. That would be flawed algorithm.

It also makes zero logical sense, that insurance companies using the latest big data crunching tools, would statically compute risk so differently, that one prices at £250 and the other at £1200.

I guess I am ranting now, and at the wrong audience here, but my views are unchanged. It's a flawed industry, and I hope automated self driven cars decimates their core business. It likely won't, but one can only hope.

I agree, 80% of the driving population are +30 years old with 3 points or less & no accidents. The insurance industry could easily insure cars for any driver +30 years with 3 points or less for no extra risk.
Other countries in the EU have cars insured for any driver.

onomatopoeia99

sebadee wrote: »

.Why is it they increase each year, lose a customer, even though the customer has shown they are lower risk?

I had this last year, it went from £227 to £524, yet everything was the same (address, no claims made), the only thing that had changed was myself and my car becoming one year older. I of course told them to jog on, and got it cheaper elsewhere, but it's a bizarre business model at face value.

Do you switch broadband / TC / phone / energy / savings account / credit card etc at the end of the introductory period offer? Sites like this one are always going on about how you should, so other industries are adopting the same model. In the old days before the lkes of MSE suppliers rewarded loyalty, now it's a fight to get new business via comparison sites.

Oh - My car insurance has falllen year on year at renewal for the last seven years, same car, same risk, same no claims as I was at maximum to start with with this insurer (Bell).

System

dunstonh wrote: »

Is it better for the insurer to have 10,000 in one risk category or one person in that risk category. .

You seem to be implying that 10,000 in one risk category would be better from their point of view?
Why is that - most prudent investment is based on spreading risk rather than concentrating it in the same kind of business?

Surely they don't actually care what the risk is, as long as they can quantify it and then charge the appropriate premium? They make their money on the mark-up between the cost of the risk as they assess it, and the amount they can get away with charging the customer. So to maximise profits they need to persuade customers that they are riskier than they really are, so that they will meekly pay a higher premium than justified by the actual risk.