# insurance fluctuation



## tom-coupe

how can insurance fluctuate so much. a month ago i got a insurance quote for a astra vxr at 164pm now nothing has changed since then. but i try to get a quote for one now and it 201pm is it anything to do with insurance companies thinking that the snow is coming lets put the price up or what. IMO there all robbing bar stewards it makes you think your punished because you would like a nice car.


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## Bero

proximity to winter should not make a difference - all policies go through a winter. if it's just a month ago call them up and ask for that policy? (do you have the reference number?)


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## Shiny

Insurers have periodic rate increases, when they do have an increase, it is usually from the first of the month (ie they may have rate increases on the 1st June, the 1st November, then the 1st Feb etc, depending on market conditions. Not every insurers increases their rates _every_ month)

The Insurer that is quoting you looks like they have a rate increase effective from the first of November. Bear in mind that they may not have had a rate increase for a number of months, so they could effectively be incorporating a number of months worth of premium increases into this.


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## bigmc

It fluctuates so much because it's a corrupt industry and they pluck figures out of the air.


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## lincslad

bigmc said:


> it fluctuates so much because it's a corrupt industry and they pluck figures out of the air.


+1....


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## t1mmy

bigmc said:


> It fluctuates so much because it's a corrupt industry and they pluck figures out of the air.


Bitter much?

Again and again it has been proven factually that the motor insurance industry (as a whole) has been making an underwriting loss for several years now. How is it corrupt when they run at a loss?

Surely these big bad corrupt businesses would be making massive profits with the premiums that they are supposedly swindling you out of.


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## bigmc

Provide figures if it's running at a loss.


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## lobotomy

I have to say the liability/blame culture and the associated legal fees in pursuing such claims has had a marked effect on insurance premiums. As much to blame therefore are the schyster lawyers who charge £xxx's per letter to another schyster lawyer claiming that their client had "_severe whiplash_" and required £xxxx's in damages as they are "_traumatised_" by the incident.

Man up!


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## t1mmy

bigmc said:


> Provide figures if it's running at a loss.


Not a problem...

First up we have an article from 2008 stating the motor insurance industry had been running at a loss for the previous 14 years...

http://www.money.co.uk/article/1000336-motor-insurance-industry-soon-to-be-in-profit.htm

2009 article...

http://www.insuranceage.co.uk/insur...-set-gbp1bn-underwriting-loss-claims-deloitte

2010 article... You can't access this unless you are a subscriber. However, the title is predicting losses worse than 2009 which were around £1bn.

http://www.insuranceage.co.uk/insur...-set-gbp1bn-underwriting-loss-claims-deloitte

2011 article showing £2bn losses last year...

http://www.postonline.co.uk/post/news/2079780/motor-insurance-underwriting-losses-gbp2bn


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## Shiny

bigmc said:


> Provide figures if it's running at a loss.


I did put a post somewhere on DW (but i cant find it now) with an internet link to Direct Line's (RBS) annual accounts showing the profit, claims and combined operating ratio, which was showing an improvement after rate increases but still showing a loss. It was originally 120% COR if i recall correctly, so for every £1 they take in motor premium, they were losing £1.20.

A lot of large insurers publish their annual accounts showing COR on the web. Ltd's company accounts are also available from companies house.

If you want to see figures, just spend a few moments on Google. :thumb:


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## kh904

t1mmy said:


> Bitter much?
> 
> Again and again it has been proven factually that the motor insurance industry (as a whole) has been making an underwriting loss for several years now. How is it corrupt when they run at a loss?
> 
> Surely these big bad corrupt businesses would be making massive profits with the premiums that they are supposedly swindling you out of.


Maybe they are making a loss, but it doesn't mean that they are not corrupt/fixing the competition.

I see them no different to banks, banks are going down, financial crisis, bail outs etc, but the people involved in the background are making a killing!

I do think that the insurance industry doesn't do itself any favours and sometimes slits it's own throat.


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## t1mmy

Why would you fix pricing and the competition resulting in an overall loss?

In my opinion there are huge differences between them and banks. The banks started their own downfall by irresponsible lending which came back to bite them. Insurance is essentially just a risk transfer mechanism which for motor is, and has been detrimental to the profit margins for many years.

I'm not saying that insurance companies and the overall industry are whiter than white by any means.

I read an interesting fact in the last week but can't find the link at the moment to the article. 
It said that even with all the large price hikes in the last year, on average people are still paying 25% less for their premiums than 10 years ago.


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## Ninja59

lobotomy said:


> I have to say the liability/blame culture and the associated legal fees in pursuing such claims has had a marked effect on insurance premiums. As much to blame therefore are the schyster lawyers who charge £xxx's per letter to another schyster lawyer claiming that their client had "_severe whiplash_" and required £xxxx's in damages as they are "_traumatised_" by the incident.
> 
> Man up!


so its all lawyers fault then every ounce of it? :wall: they do not go after every claim you know espcially if it is on a CFA! and also it goes against the SRA code of conduct. I dont think you quite understand how much time and effort actually goes into sending a single solicitors/lawyers letter out...

and if you actually understood the Tort system (yes which includes Personal Injury) then its not that easy...also proving trauma is alot harder than just saying you have it in alot of circumstances it has to be actually medically recognised...as for whiplash there is not a 100% proof way of saying someone has it oh look at that its not a lawyers (solicitors) fault.


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## kh904

t1mmy said:


> Why would you fix pricing and the competition resulting in an overall loss?
> 
> In my opinion there are huge differences between them and banks. The banks started their own downfall by irresponsible lending which came back to bite them. Insurance is essentially just a risk transfer mechanism which for motor is, and has been detrimental to the profit margins for many years.
> 
> I'm not saying that insurance companies and the overall industry are whiter than white by any means.
> 
> I read an interesting fact in the last week but can't find the link at the moment to the article.
> It said that even with all the large price hikes in the last year, on average people are still paying 25% less for their premiums than 10 years ago.


But banking is also a risk transfer mechanism to some degree 
Lending to customers who may or may not pay back, short selling, credit default swaps etc etc - all those other financial products to minimise risk in the stock market & maximise profits!


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## Weazel

lobotomy said:


> I have to say the liability/blame culture and the associated legal fees in pursuing such claims has had a marked effect on insurance premiums. As much to blame therefore are the schyster lawyers who charge £xxx's per letter to another schyster lawyer claiming that their client had "_severe whiplash_" and required £xxxx's in damages as they are "_traumatised_" by the incident.
> 
> Man up!


To be fair i would not blame the whole situation on the lawyers which will deal with these cases.
One reason for the increase in premiums year by year is economic loss distribution, every time some muppet says they have whiplash for the sake of getting compensation the payout is distributed among all the policy holders in that company to regain that loss.
So i believe it to be more for the blaggers out there that when they see the possibility of compensation their greedy little eyes light up.
Insurance is there to protect you, no matter how s**t the premiums are at the moment. 
Just my thoughts on the matter :thumb:


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## Ninja59

kh904 said:


> But banking is also a risk transfer mechanism to some degree
> Lending to customers who may or may not pay back, short selling, credit default swaps etc etc - all those other financial products to minimise risk in the stock market & maximise profits!


everything has a risk though....whether you get up in the morning or whatever, step in the car or whatever everything has risk now how risky it is is another matter entirely


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## justina3

t1mmy said:


> Not a problem...
> 
> First up we have an article from 2008 stating the motor insurance industry had been running at a loss for the previous 14 years...
> 
> http://www.money.co.uk/article/1000336-motor-insurance-industry-soon-to-be-in-profit.htm
> 
> 2009 article...
> 
> http://www.insuranceage.co.uk/insur...-set-gbp1bn-underwriting-loss-claims-deloitte
> 
> 2010 article... You can't access this unless you are a subscriber. However, the title is predicting losses worse than 2009 which were around £1bn.
> 
> http://www.insuranceage.co.uk/insur...-set-gbp1bn-underwriting-loss-claims-deloitte
> 
> 2011 article showing £2bn losses last year...
> 
> http://www.postonline.co.uk/post/news/2079780/motor-insurance-underwriting-losses-gbp2bn


A lot of bottom line losses can easily be generated by a clever accountant and something most big businesses strive for to avoid paying corporation tax


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## Rob_Quads

t1mmy said:


> . How is it corrupt when they run at a loss?


Running at a loss proves nothing. The amount of companies that run at a loss and then eventually just close up / go bust yet all the people at the top have walked away with VERY healthy payments / pirks etc.

Perfect example (although on a smaller scale) was the boss of my wifes old company. Had around 50 employees. Of 3 branches only one was making any money, it was keeping the business just on the 0 balance. Eventually the company had to be sold (I say sold it was virtually given away due to the record) but he walked away with a 2.5M house which had been fitted out with every security item under the sun such as electric gates, top of the range alarms, cctvs etc. 
His staff worked thier arses off to keep the company afloat yet while it was being mis-managed and yet he walked away pretty while the others suffered


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## millns84

I know first hand that esure/sheilas' wheels are NOT making a loss


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## t1mmy

millns84 said:


> I know first hand that esure/sheilas' wheels are NOT making a loss


Neither were Admiral, but they are looking a bit more rocky recently. I was talking overall as an industry.


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## centenary

t1mmy said:


> Not a problem...
> 
> First up we have an article from 2008 stating the motor insurance industry had been running at a loss for the previous 14 years...
> 
> http://www.money.co.uk/article/1000336-motor-insurance-industry-soon-to-be-in-profit.htm
> 
> 2009 article...
> 
> http://www.insuranceage.co.uk/insur...-set-gbp1bn-underwriting-loss-claims-deloitte
> 
> 2010 article... You can't access this unless you are a subscriber. However, the title is predicting losses worse than 2009 which were around £1bn.
> 
> http://www.insuranceage.co.uk/insur...-set-gbp1bn-underwriting-loss-claims-deloitte
> 
> 2011 article showing £2bn losses last year...
> 
> http://www.postonline.co.uk/post/news/2079780/motor-insurance-underwriting-losses-gbp2bn


LOL!

You seriously swallows that info that the ins co's have made such massive losses for so long?

Hmmmm, they must have made soooo much money in the previous years to tide them over this bad spell.

The insurance industry is corrupt because it is prepared to write off cars with relatively minor damage. Take any car to an accident repair place and the first question they generally ask 'is it an insurance job or are you paying for it?'

The ins industry condones this by not stamping on it.

The insurance industry is corrupt because it sells you details to accident management companies who pester you into a 'replacement' hire car which youcould end up paying mega money for.

The ins industry is corrupt because they take your premium based on the value of your car then, when writing it off, give you way under market value so you have to add more money than you should to get a replacement.

The insurance industry has lost 'billions of pounds' over 14 years? yeah, Im weeping buckets for them. Not!


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## t1mmy

centenary - You're confusing me for someone who has a one track mind on the subject. I'm glad what I put has opened up some debate and you and others have raised very valid points. As previously stated by me I don't think the industry is whiter than white.

However, why couldn't they have made those losses for so long? Collectively as a market, motor insurance has a massive GWP. Motor insurance is just one product of insurance that these companies offer.

As stated by Shiny and others (in other threads), private motor has been sold as a lost leader by insurance companies for years. They battle it out to win market share and if this means that they have to pick up the business at loss making premiums then so be it in a lot of cases. They do this because it gives them access to cross-sell household and commercial insurance products that on the whole are far more profitable for the companies. They also get the chance to sell products that are classed as non-risk income, for example, legal expenses.

They also make a lot of investments financially which in the "good" economic times have proven prudent and have boosted reserves. When times are tougher they eat into these reserves to maintain rating and ultimately market share.


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## t1mmy

centenary said:


> The insurance industry is corrupt because it sells you details to accident management companies who pester you into a 'replacement' hire car which youcould end up paying mega money for.


Your options and the consequences of your choice are explained before you make a decision. Ultimately it is your decision to use the services of an accident management company.



centenary said:


> The ins industry is corrupt because they take your premium based on the value of your car then, when writing it off, give you way under market value so you have to add more money than you should to get a replacement.


They take a premium based on the value of "your" car that "you" give them to rate on. How many people value their own vehicle more that it is actually worth? I'd suggest lots. If you accept under market value for a total write off that is up to you. If you aren't happy with the price offered you can provide evidence that it is worth more. Also vehicle value is only one of many rating factors that are used to generate a premium



centenary said:


> The insurance industry has lost 'billions of pounds' over 14 years? yeah, Im weeping buckets for them. Not!


Nowhere did I say that. One part of the industry has lost a lot of money for years. Overall with all products combined the industry has been making profit, they wouldn't be here if they didn't. At the end of they day they are a business providing employment to thousands of people, isn't it shocking that they want to make money :doublesho


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## Shiny

> The ins industry is corrupt because they take your premium based on the value of your car then, when writing it off, give you way under market value so you have to add more money than you should to get a replacement.


That's news to me, did this come from a reliable source, perhaps you can link us to this?

Fact is, motor insurance has been sold as a loss leader, a cheap marketing book to bombard customers with pet, home, travel etc insurance. Now household is making a loss and there is no return on the investment market, they can't continue to compensate for motor losses elsewhere, especially as these losses have increased massively with hire car and injury costs.

I was going to give a much more detailed reply but posting from the phone is hard enough for an old man like me!


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## bigmc

Lloyd it's my experience too, insurance offers trade values and you have to fight to get true market value.


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## Shiny

Firstly, value is rarely a factor in the rating of a private car insurance policy. The value is not an "indemnity limit" or "sum insured", ie the most an insurer will pay or a fixed amount they will pay (unless of course it is an agreed value policy).

In fact, if you put £4k on your policy when you took it out, if the current market value of your car at the time of write off was £5k, then £5k is what you should get - http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html

Most Insurers rate motor insurance by allowing an "age of vehicle" discount, the older a car gets, the higher the discount, as by the nature of depreciation, the Insurers will pay out less for an older car than they would an identical newer car. It would be near on impossible to assess a car's value at each renewal (and no doubt upset a lot of people to find out what their car is worth!), hence why value is not used as a rating factor but instead a car is rated on it's age.

Value does form part of an acceptance criteria though, for example, most Insurers have a maximum value limit, often around £5k for TPFT and £20k for Comp and won't insure cars over that value. Some obviously have a higher limit than £20k and some apply excess value loadings over and above the limit.

For example, Aviva, always used to apply the same rate up to £50k, so if you car was worth £20k or £40k, the rate would be the same and only affected by the age of the car. However, go above £50k and the premium gets loaded. This is why as a Broker, in the good old days when i did a lot of motor insurance, if i had customers with cars over £50k, I would discuss the current market value at each renewal and re-rate the policy based on the depreciated value to ensure they were getting the best premium for their car.

As for total loss offers, Insurers don't tend to always go in low these days, often they appoint independent engineers anyway. I've dealt with many claims where the first offer was more than acceptable to the customer. All this "never accept your first offer, they will always increase it" is absolute rubbish in the real world outside of the pub/internet. Sometimes offers are increased where the is the _right_ evidence to substantiate it, but definitely not always. The problem is often that people just don't realise what a car is worth. They see adverts for cars (with different mileage/condition) at top asking price. The asking price for a car is not the current market value of a car. What is more important is to look at sold cars as these are a better indication of a market value.

I've lost count of the amount of times i have sat down with a customer looking at values and for every 10 that there are above the value of the offer, there are often twice as many cars for sale below the offer.

Yes sometimes offers are poor and they are revised with proof, but to be honest it is not as often as people like to make out. It is like anything, people don't usually moan and post when they have been happy with an offer, it's only those who complain that you get to hear of.


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