W8BGS Posted April 7, 2017 Share Posted April 7, 2017 The Ogden ruling has heavily affected insurance in the past month. Insurance is frustrating to get to grips with. Companies will always try and increase premiums at renewal, they bank on people not shopping around. Newer cars will be easier to insure, even if more expensive, its assumed they are safer and probably have better security features. Obviously certain cars will have a reputation as being easier to steal, statistically more likely to crash etc. An aging RWD car with around 300bhp will attract a large premium, each year they assume the car will depreciate a bit more, yet repairs increase. Also in the first year some insurers sell at a loss, they then increase the premium at renewal to make them break even over the course of the 2nd year, a profit is sometimes not made until the 3rd year. Insurance companies don't make a great deal, the margins aren't massive, for every sale achieved via a comparison site there is a large commission amount payable. I don't agree with 100% increases, my insurer tried the same, I switched for less than I was paying last year, with thanks to Greenlight. Quote Link to comment Share on other sites More sharing options...
Strudul Posted April 7, 2017 Share Posted April 7, 2017 How can you sell insurance at a loss? Surely they only make a loss if the claims outweigh the premium? Quote Link to comment Share on other sites More sharing options...
TT350 Posted April 7, 2017 Share Posted April 7, 2017 I pioneered this phenomena a couple of weeks ago. I was being quoted thousands. Plural. By companies that would even quote me. Sky who I was previously with couldn't even give me a quote. Nor Adrian Flux. It was 800 quid with Sky last time. From 800 quid to not even being able to quote me. Others were 4k plus if I recall. Something has definitely changed in the insurance world and it's not just the change in tax. Quote Link to comment Share on other sites More sharing options...
nowhereboy Posted April 8, 2017 Share Posted April 8, 2017 Most insurers will load a policy with commission at renewal, best bet is comparison websites as most actually go through a broker and the broker will sell it at a loss in year one by covering a portion of the premium. Same as most businesses unfortunately, sell at a loss to new customers and exploit the loyal ones to make up for the short fall. Setting that aside tho prices have risen for many this year regardless of commission and tax etc , if insurers have paid out a lot in claims within the last year everyone suffers unfortunately. The amount of personal injury claims paid out due to "whiplash" etc is absolutely killing the industry. Quote Link to comment Share on other sites More sharing options...
nowhereboy Posted April 8, 2017 Share Posted April 8, 2017 How can you sell insurance at a loss? Surely they only make a loss if the claims outweigh the premium? If you're a broker. Typical arrangement fee is between £25 or £30 pounds, in year one that's all the broker will make and the rest will go to the insurer. The broker has to pay the comparison website around £50 (If I remember rightly) for each new policy sold and sometimes will cover part of the insurers premium too. Quote Link to comment Share on other sites More sharing options...
ilogikal1 Posted April 8, 2017 Share Posted April 8, 2017 Insurance companies don't make a great deal, the margins aren't massive Admiral Group, for example, only made £336m profit before tax on car insurance in the U.K. in 2016. Hardly worth the bother for them really... 1 Quote Link to comment Share on other sites More sharing options...
W8BGS Posted April 8, 2017 Share Posted April 8, 2017 Insurance companies don't make a great deal, the margins aren't massive Admiral Group, for example, only made £336m profit before tax on car insurance in the U.K. in 2016. Hardly worth the bother for them really... Fair point, but how much of this was from the core policy and how much from add-ons and interest from DD payers and MTA fees... The core policy does not make insurance companies much profit. Quote Link to comment Share on other sites More sharing options...
StormWhite Posted May 1, 2019 Share Posted May 1, 2019 You never see a poor bookmaker and I am sure you will never see a poor insurer. Quote Link to comment Share on other sites More sharing options...
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