Silly NCD Question for new quotes

PennineLady

Hi Guys,

Can any of you lovely insurance experts answer this hypothetical question regarding No Claims Discount (NCD).

For the sake of argument & simplicity, there are 2 policyholders with same rating factors, insured with Insurance Company A. They are both enjoying 20 real years of NCD.

At last renewal, Driver 1 goes with Insurance Company B on their scale 20 Years NCD. Driver 2 goes with Insurance Company C on their scale of 9 or more Years NCD.

They both have a claim during the year where they were at fault.

Insurance Company B (Driver 1) offering renewal net of 12 years NCD (reduction of 8 years).

Insurance Company C (Driver 2) offering renewal net of 2 years NCD (reduction of 7 years)

My question is, when looking for quotes at this renewal via the comparison sites, what do they each put down for their NCD in years?

Cheers!

Mark_d

Use what is in the renewal quotes.  These are the amounts  of NCD you are able to prove (if required)

DullGreyGuy

Company B would be highly unusual to offer 12 years NCD, similarly company C 2. Almost universally a fault claim will reduce 5+ years down to 3, a tiny minority used to simply deduct 2 years irrespective of your level. Ultimately how NCD works for that insurer will be listed in their policy book. 


Both drivers will need to declare the number of years on their renewal notice, ultimately they've made a choice at inception to go with different companies with different approaches to how the NCD scale works. 

PennineLady

Thanks DullGreyGuy

What you say is true and I've just realised that if I had 20 Years NCD and declared that discount into a comparison site I may end up moving to another company.

However, if the new company maximum NCD scale was only 9 years then next year (subject to no claims) I'd have to declare just 9 years and not the 'true' 21 years and that is what the renewal notice confirms.

DullGreyGuy

PennineLady said:

However, if the new company maximum NCD scale was only 9 years then next year (subject to no claims) I'd have to declare just 9 years and not the 'true' 21 years and that is what the renewal notice confirms.

That is a different scenario and effectively comes down to system limitations... in my days in motor our renewal notices will have stated 5 or more years if you had 5+ so it opens the door to the fact there is more but doesn't state what it is. 

There are two ways of tackling it... go to your current insurer and tell them you send them proof of NCD for 20 years and therefore can they issue a confirmation that you now have 21 years. Assuming you did send proof of NCD many will do this for you. Obviously many dont ask for proof of NCD up front and so if they have nothing on file they may not be willing to. 

The alternative is going to your new insurer and explain the situation. Historically NCD maxed out at 5 years (generally 65%-70% discount) and then came along some giving up to 9 years NCD but it was a bit of a con really because we gave 70% at 5 years NCD whereas a competitor gave 69% at 8 years NCD. So people thought it was better as it was a higher number but the discount was actually lower. 

Not many give any credit for over 9 years but the few that do will be used to the fact that may other insurers will just say 9 or more years, or 5 or more years, as we did. They'll have a process to deal with it, most likely getting you to send the prior proof of NCD that shows 20 years plus this years proof of NCD that shows no claims and then be able to do the 20 + 1 sum 

PennineLady

Thanks DullGreyGuy,

I remember those days very well (I used to work for General Accident back in the late 70s).... Insurance was so much simpler back then!

DullGreyGuy

PennineLady said:

Thanks DullGreyGuy,

I remember those days very well (I used to work for General Accident back in the late 70s).... Insurance was so much simpler back then!

I think it was just different. 

I'm a bit younger but my first work experience in insurance was the mid-late 90s for an insurer that had grown inorganically. Everything was still regionalised, in principle there was a single central computer that held the core customer record but 1) at least 20% of the time a policy wasnt in the core system, 2) regional systems went off line over night so when a customer phoned at 9pm we could see they had a policy held in the Derby branch but no details of what cover they had etc until the computers came back at 8am and 3) felt like 50% of the time the branch was wrong. 

When I later rejoined insurance in early 2000s now with a different company it was still the same pain dealing with that company, they'd send your letter of claim back saying "not this branch" rather than pass it on to whichever branch it was supposed to be. 

Consumer insurance thankfully is much more digital these days and it does generally give a better experience in my opinion. Its when you get to business done at Lloyds where ink pads and stamps are still used to bind business and you learn Lloyd's ops outsourcer has teams that review the docks and data entry based on the stamps etc with there being more significance in some of the flourishes (eg if a stamp has a left leaning anchor its premiums will be cleared through the UK market, a right leaning anchor is cleared through the Brussels market, no anchor is money doesn't go via the market. 

PennineLady

DullGreyGuy said:

PennineLady said:

Thanks DullGreyGuy,

I remember those days very well (I used to work for General Accident back in the late 70s).... Insurance was so much simpler back then!

I think it was just different. 

I'm a bit younger but my first work experience in insurance was the mid-late 90s for an insurer that had grown inorganically. Everything was still regionalised, in principle there was a single central computer that held the core customer record but 1) at least 20% of the time a policy wasnt in the core system, 2) regional systems went off line over night so when a customer phoned at 9pm we could see they had a policy held in the Derby branch but no details of what cover they had etc until the computers came back at 8am and 3) felt like 50% of the time the branch was wrong. 

When I later rejoined insurance in early 2000s now with a different company it was still the same pain dealing with that company, they'd send your letter of claim back saying "not this branch" rather than pass it on to whichever branch it was supposed to be. 

Consumer insurance thankfully is much more digital these days and it does generally give a better experience in my opinion. Its when you get to business done at Lloyds where ink pads and stamps are still used to bind business and you learn Lloyd's ops outsourcer has teams that review the docks and data entry based on the stamps etc with there being more significance in some of the flourishes (eg if a stamp has a left leaning anchor its premiums will be cleared through the UK market, a right leaning anchor is cleared through the Brussels market, no anchor is money doesn't go via the market. 

I see where you get your detailed knowledge from now!

Consumer insurance Is indeed more digital these days and I agree it does generally give a better experience but the frustrating part is sometimes it's difficult to for insurers to take individual circumstances into account, especially with regards to Ex Company Car drivers & No Claim discount issue.

I also find it amusing how they can sometimes 'twist' information to 'justify' price hikes.

When I was made redundant a few years back my premium shot up and their reasoning was I'd be busy driving around looking for work/going to interviews in unfamiliar locations. Also, they said, with no income I'd have less money to maintain my car. I don't know how they arrive at these statistics as none of that applied to me.

I've seen premiums rise significantly depending on occupation even though the car is being used for Social, Domestic & Pleasure Use and they travel to work by public transport and car is in a locked garage. It wouldn't surprise me if they loaded single people as they were more likely to drive on an evening and socialise/dating... I wish!

DullGreyGuy

PennineLady said:

DullGreyGuy said:

PennineLady said:

Thanks DullGreyGuy,

I remember those days very well (I used to work for General Accident back in the late 70s).... Insurance was so much simpler back then!

I think it was just different. 

I'm a bit younger but my first work experience in insurance was the mid-late 90s for an insurer that had grown inorganically. Everything was still regionalised, in principle there was a single central computer that held the core customer record but 1) at least 20% of the time a policy wasnt in the core system, 2) regional systems went off line over night so when a customer phoned at 9pm we could see they had a policy held in the Derby branch but no details of what cover they had etc until the computers came back at 8am and 3) felt like 50% of the time the branch was wrong. 

When I later rejoined insurance in early 2000s now with a different company it was still the same pain dealing with that company, they'd send your letter of claim back saying "not this branch" rather than pass it on to whichever branch it was supposed to be. 

Consumer insurance thankfully is much more digital these days and it does generally give a better experience in my opinion. Its when you get to business done at Lloyds where ink pads and stamps are still used to bind business and you learn Lloyd's ops outsourcer has teams that review the docks and data entry based on the stamps etc with there being more significance in some of the flourishes (eg if a stamp has a left leaning anchor its premiums will be cleared through the UK market, a right leaning anchor is cleared through the Brussels market, no anchor is money doesn't go via the market. 

I see where you get your detailed knowledge from now!

Consumer insurance Is indeed more digital these days and I agree it does generally give a better experience but the frustrating part is sometimes it's difficult to for insurers to take individual circumstances into account, especially with regards to Ex Company Car drivers & No Claim discount issue.

I also find it amusing how they can sometimes 'twist' information to 'justify' price hikes.

When I was made redundant a few years back my premium shot up and their reasoning was I'd be busy driving around looking for work/going to interviews in unfamiliar locations. Also, they said, with no income I'd have less money to maintain my car. I don't know how they arrive at these statistics as none of that applied to me.

I've seen premiums rise significantly depending on occupation even though the car is being used for Social, Domestic & Pleasure Use and they travel to work by public transport and car is in a locked garage. It wouldn't surprise me if they loaded single people as they were more likely to drive on an evening and socialise/dating... I wish!

In the 70s brokers will have had rate tables and calculated the premiums for themselves, new tables were sent out monthly generally. There was no rationalisation as to why a Mini Cooper gave a higher premium than a Mercedes SL but it was evident from the tables that was what was happening. 

These days agents working for direct insurers or brokers have a black box, they enter the data and get a premium out. They've no idea if it's your choice of car, where you live, your profession or anything else thats driving the higher premium. Unfortunately they tend to try and be helpful and suggest what may be driving it (both factors and rationals) but it's no more accurate than asking a random bloke down the pub. 

Consumer insurance is predominately priced on statistical analysis, thats not changed in the timeframes, and it's not done by "logic" as most people seem to assume. As time has gone on and computers more powerful its been possible to analyse much more data quicker and as you now have a computer programme calculating premiums not a guy with a bunch of tables and slide rule the interdependencies between elements can get more complex. 

Pre the EU law changes all our tables used to be 1 dimensional - eg years NCD with 0-70% discount for each value with the one exception of Age and Gender which used to be a 2d table as the combination of young male driver was much more of a worry than middle age male driver. Now tables aren't printed they can be Nth dimensional because similarly you may be much more worried of a young person having a hot hatch than a granny.

It actually goes further than that, if you are married with the pair of you on the policy it will most likely be cheaper than married and either one person named on the driver or two people named but the second person isn't the spouse. You can try and rationalise it and say maybe if the wife/husband isn't allowed to drive then its used for other purposes like showing off to potential "bits on the side" but thats not how pricing works... numbers show claims experience is better with Insured & Spouse than Insured Only or Insured & ND, who knows why but its consistent. 

PennineLady

DullGreyGuy said:

PennineLady said:

DullGreyGuy said:

PennineLady said:

Thanks DullGreyGuy,

I remember those days very well (I used to work for General Accident back in the late 70s).... Insurance was so much simpler back then!

I think it was just different. 

I'm a bit younger but my first work experience in insurance was the mid-late 90s for an insurer that had grown inorganically. Everything was still regionalised, in principle there was a single central computer that held the core customer record but 1) at least 20% of the time a policy wasnt in the core system, 2) regional systems went off line over night so when a customer phoned at 9pm we could see they had a policy held in the Derby branch but no details of what cover they had etc until the computers came back at 8am and 3) felt like 50% of the time the branch was wrong. 

When I later rejoined insurance in early 2000s now with a different company it was still the same pain dealing with that company, they'd send your letter of claim back saying "not this branch" rather than pass it on to whichever branch it was supposed to be. 

Consumer insurance thankfully is much more digital these days and it does generally give a better experience in my opinion. Its when you get to business done at Lloyds where ink pads and stamps are still used to bind business and you learn Lloyd's ops outsourcer has teams that review the docks and data entry based on the stamps etc with there being more significance in some of the flourishes (eg if a stamp has a left leaning anchor its premiums will be cleared through the UK market, a right leaning anchor is cleared through the Brussels market, no anchor is money doesn't go via the market. 

I see where you get your detailed knowledge from now!

Consumer insurance Is indeed more digital these days and I agree it does generally give a better experience but the frustrating part is sometimes it's difficult to for insurers to take individual circumstances into account, especially with regards to Ex Company Car drivers & No Claim discount issue.

I also find it amusing how they can sometimes 'twist' information to 'justify' price hikes.

When I was made redundant a few years back my premium shot up and their reasoning was I'd be busy driving around looking for work/going to interviews in unfamiliar locations. Also, they said, with no income I'd have less money to maintain my car. I don't know how they arrive at these statistics as none of that applied to me.

I've seen premiums rise significantly depending on occupation even though the car is being used for Social, Domestic & Pleasure Use and they travel to work by public transport and car is in a locked garage. It wouldn't surprise me if they loaded single people as they were more likely to drive on an evening and socialise/dating... I wish!

In the 70s brokers will have had rate tables and calculated the premiums for themselves, new tables were sent out monthly generally. There was no rationalisation as to why a Mini Cooper gave a higher premium than a Mercedes SL but it was evident from the tables that was what was happening. 

These days agents working for direct insurers or brokers have a black box, they enter the data and get a premium out. They've no idea if it's your choice of car, where you live, your profession or anything else thats driving the higher premium. Unfortunately they tend to try and be helpful and suggest what may be driving it (both factors and rationals) but it's no more accurate than asking a random bloke down the pub. 

Consumer insurance is predominately priced on statistical analysis, thats not changed in the timeframes, and it's not done by "logic" as most people seem to assume. As time has gone on and computers more powerful its been possible to analyse much more data quicker and as you now have a computer programme calculating premiums not a guy with a bunch of tables and slide rule the interdependencies between elements can get more complex. 

Pre the EU law changes all our tables used to be 1 dimensional - eg years NCD with 0-70% discount for each value with the one exception of Age and Gender which used to be a 2d table as the combination of young male driver was much more of a worry than middle age male driver. Now tables aren't printed they can be Nth dimensional because similarly you may be much more worried of a young person having a hot hatch than a granny.

It actually goes further than that, if you are married with the pair of you on the policy it will most likely be cheaper than married and either one person named on the driver or two people named but the second person isn't the spouse. You can try and rationalise it and say maybe if the wife/husband isn't allowed to drive then its used for other purposes like showing off to potential "bits on the side" but thats not how pricing works... numbers show claims experience is better with Insured & Spouse than Insured Only or Insured & ND, who knows why but its consistent. 

DullGreyGuy, thanks for all your input today.... it's been a very interesting read and I've learned a lot! :-)