RIP OFF CAR INSURANCE RENEWAL QUOTES

Clifter

To me your comments don't  make sense to me. SAGA offered me 3 years fixed at £372 last year so why would they do that at a loss? In fact, I could have gone with another company who quoted me £535 but with a higher excess. If at least two or more other companies can beat SAGA they must be using the wrong underwriters. SAGA also offered me a discount for being a loyal customer when I said I was leaving, this annoyed me as they could have done that in the first place... in my mind that is taking me for granted that I would have just renewed thus giving them more profit. Additionally, the first quote was a jump from £372 to £718 or  93%.

DullGreyGuy

Welcome to the world of business strategy and insurance revenue streams etc. 

First of all lets remember that Saga are not an insurer but an intermediary. It is the "underwriters" are the insurance companies that ultimately carry the liability to pay claims etc. Clearly what we dont know is the commercial arrangement between Saga and the insurers on its panel. Normally they get a percentage of premium charged, there may be a profit share and Saga can generate other revenues by passing customers on to credit hire etc in non-fault accidents. I've never seen a case where there is a loss sharing agreement, the only risk to them is losing all their underwriters if they get burnt too badly. 

Secondly insurance is a long term game thought over years not weeks or months. Premium being collected today could well still be being used to pay long tail claim in 20 years time. The market is also cyclical with periods where claims are high and premiums low and times when the inverse is true. If you think the market is about to change then it can be worth biting the bullet, getting market share in exchange for underwriting losses in the hope that you retain those customers when the market turns making profits that exceed the losses.

The problem is insurance is a highly commoditised distress purchase... no one goes down the pub and says they were feeling flush this month after bumper pay cheque so they decided to treat themselves to a Hiscox insurance policy rather than the normal Admiral one. So yes, generally people dont want to write business at a loss, unless its a strategic decision, but also no one wants to be the first to rack up their prices because then they lose a large slug of their customers and its expensive to win them back next year when others have upped their premiums to yours. 

Companies look at ways to create stickiness, 3 year price promise is great as in year 2 you may see some a bit cheaper but then you lose next years promise and premiums could have shot up then. Insurers similarly do multi-vehicle policies to make it more painful to have to shop around for 3 cars' insurance on the same date rather than having them spread across the year. Auto-renewal suits the lazy, you dont have to do anything and we'll take care of it for you. 

Every insurer (underwriting company) has different experiences, different strategic goals, different views on where the market is going, buys different reinsurance, has a different balance sheet and P&L. As such every insurer will vary on price for the same risk both because how their experience rates that risk and because of the wider considerations. Intermediaries like Saga hope to get a good price by using a range of insurers on their panel but dont necessary reconsult all of them at renewal time (for Motor its likely they do, for more complex classes of insurance they won't rebroke the business if the incumbent renewal price looks sensible).

A 95% increase is likely to mean either they feel they've gotten something wrong or saw a big swing in claims from people that share some characteristic with you, could be they fee over exposed to people with some form of characteristics you have (eg if you owned a Range Rover) and so will reduce the exposure with a high price, or it could be they've simply got to the end of how much loss they can take and now accept big prices increases and a smaller book.


You mention the three year fixed premium? Is that what you were on previously? If so the 95% increase isn't from last year but from 3 years ago which on a compound basis is still high but no way near as excessive as it sounds if it wasn't fixed last year. 

Clifter

The 3 year fixed  offer (£372) was from last year  2023 where my premium had already risen from the year before by 15% 2022.  I rang them and went through the usual 'dance' and settled at £372.  Comparison sites were cheaper but not by that much and my loyalty kicked-in and I decided to stay. This year the original quote worked out at 93% increase from 2023. I understand that SAGA are in financial trouble reporting substantial losses but now they have lost a loyal customer and once that happened I now will now have no reason not to use comparison sites next year and get the best deal possible. My point is if they push the premiums to high customers will be financially forced  to  look else where. With 3 cars in my immediate family I doubt whether SAGA will get anymore business from me. I suggest readers don't just accept blindly renewing without checking if the same cover can be gained for less with other brokers. I can't spend anymore time on this subject but hopefully readers will be able to see loyalty does not pay. 

peter12345678910

In America they have a similar problem with 2020 older Kia because they are known for not having immobilizers. Made in Mexico!

born_again

Clifter said:

The 3 year fixed  offer (£372) was from last year  2023 where my premium had already risen from the year before by 15% 2022.  I rang them and went through the usual 'dance' and settled at £372.  Comparison sites were cheaper but not by that much and my loyalty kicked-in and I decided to stay. This year the original quote worked out at 93% increase from 2023. I understand that SAGA are in financial trouble reporting substantial losses but now they have lost a loyal customer and once that happened I now will now have no reason not to use comparison sites next year and get the best deal possible. My point is if they push the premiums to high customers will be financially forced  to  look else where. With 3 cars in my immediate family I doubt whether SAGA will get anymore business from me. I suggest readers don't just accept blindly renewing without checking if the same cover can be gained for less with other brokers. I can't spend anymore time on this subject but hopefully readers will be able to see loyalty does not pay. 

If you are on 3 fixed year deal from 2023, so runs to 2026. Why are you doing a quote again this year 2024?

Makes no sense what so ever.. Same for next year?

3-year fixed price

The price you pay for one year’s cover is the price you’ll pay for year 2 and year 3, if nothing changes.

https://www.saga.co.uk/insurance/campaigns/car-insurance/choose-saga/enter-registration/

Clifter

Correct it would't have made any sense however I didn't't take the 3 year deal due to my lease coming to an end. I managed to extend the lease (due to illness and not using the car much) for 1 more year. Hope this now makes sense.