UK Car Insurance Rates Must Harden As Loss Making Companies Claims Reserves Run Dry!
Incredibly
Car Insurance companies in the UK are struggling to make a profit and 2010 is likely to see a large reduction in the supply of car insurance, with many famous brands and suppliers predicted to disappear from the high street and our television screens as the market adjusts to cater for the massive losses, according to analysts from car insurance comparison website
Car-Insurance.tv.
Recently released figures show that the UK Motor Insurance market has been consistently losing money since 2004 when the total UK profit from underwriting car insurance policies was £77 million.
In 2007 the UK car insurance market made a £1.1 billion underwriting loss, last year the loss was £1.3 billion and the figures for 2009 are expected to be worse........
Very few car insurance providers have escaped the losses and are profitable, whilst many have released claims reserves held from previous profitable years to disguise the 'actual ' loss.
So what is causing such massive losses in a large compulsory market that not so long ago was the most aggressive in the world?
On the face of it the answer appears to be simple ...... The Cost of Claims!
Claims are the problem not because the Car Insurance Companies have failed to include the rising costs of claims into their pricing structures; but because they have failed to cover the true costs in the retail price!
Car Insurance underwriters seem to have forgotten the basic rules of betting when setting their prices - and that is, that the Bookie never loses.......
To understand where the car insurance underwriting companies have gone wrong you first need to examine how they arrive at the price of a car insurance policy premium.
The cost of your car insurance premium is basically made up of three components:
1. The costs of production - Staff, Systems, Distribution etc
2. The costs of losses - known claims ratios ( the proportion of a policy premium pool that gets eaten up in claims)
3. Profit
The cost of all these components can be calculated by clever people called actuaries who work for the insurance companies and the rates set accordingly.
So what's gone wrong?
Well naturally it is obvious to first look at claims as the cause of the losses - but the truth is far from this end of the life of a car insurance policy......
The frequency of claims has either fallen or remained fairly constant over the period of losses and the actual cost of claims has only risen by 1 percent.
Despite all the noise made about gangs of car insurance claims fraudsters roaming the streets of the UK, the fact of the matter is that most of this is propoganda aimed at deterring fraud which naturally rises during a recession/depression. The number of fraud cases are really insignificant in the true scale of the market to affect pricing.
Admittedly there has been a significant increase in the number of personal injury related claims, egged on by claims farming companies, which would affect long term pricing, however the losses experienced by Car Insurance companies are nothing to do with claims and claims pricing.
These type of claims fluctuations have always been dealt with successfully in the past by car insurance companies by adjusting reserve ratios or negotiating better re-insurance ( laying the risk off), or more importantly by adjusting price ........
But this time something is different....
Car Insurance Companies can no longer set the price! Not if they want to win the business anyway!
And they certainly cannot sell policies at the premium levels that the Actuaries suggest!
Why? Seemple .......The Internet!
And more importantly Car Insurance Price Comparison websites or aggregators as they are known in the industry, which account for around 90 percent of the Car Insurance sold online. Since around 2004 it has been possible to easily
compare car insurance quotes online from numerous suppliers, and invariably the cheapest premium wins the business.
Car Insurance companies not longer set their own prices! And this is the problem!
In a race to achieve enough volume to make a book of car insurance business profitable the car insurance companies have been selling their
car insurance polices too cheap and covering their losses with their claims reserves........time is running out!
Labels: Actuaries, car insurance, car insurance fraud, Car Insurance Pricing, car insurance rates, cheap car insurance, cheap motor insurance, claims, compare car insurance, premiums, quotes, UK Car Insurance
Cheap Classic Car Insurance Cover
Cheap Classic Car Insurance CoverBy car insurance specialist blogger and expert
Dave HealeyDo you own a car over fifteen years old?
Do you own a car which could be considered a classic?
If you do you may well be entitled to cover it under what is known in the industry as a
classic car insurance policy. In the past there were many more restrictions on cover under this type of policy and specialist motor insurance brokers and insurance companies were very particular about the type, age make and models of the cars they wished to cover on their books.
Times have changed and technology has led to many more cars now fitting into a bracket that was once reserved for the glamourous, collector and vintage car owners. It is now possible to obtain both cheap quotes and classic car covers online from many providers including the majority of those famous high street brands, who have realised that nearly fifty percent of the cars on the road now fall within the strict underwriting parameters for classic car policies. Consequently premiums in this market, which were always cheaper than standard cover, have become much more competitive in recent years, with the entry into the market of many of the larger insurance companies.
When searching for the right covers it is wise to get a range of classic car insurance online quotes from various different sources. Not all motor companies are the same, and neither are all classic policy conditions.
When applying for a classic quote you should be aware of the varying limits of cover and restrictions that may be put on driving the vehicle. For example many of these policies will only allow you very limited road mileage each year, sometimes as little as 3000 miles per annum. This is fine if you have an expensive collectors car that is garaged throughout the year and only taken out for the odd cruise or rally. The problems occur much more frequently when non valuable classic cars are insured under this type of policy when they should really be covered under a more embracing standard motor insurance. Unfortunately, restrictive policy conditions often only come to light after an accident and a claim is made, rejected by the insurer and leaves the policyholder feeling missold and abandoned.
If you have decided that a classic car policy is right for your car, then when applying for quotes online always check that the policy is right for you, the owner as well. Many policies are designed to charge by the lifestyle of the insured and as with all car insurance there is a tendency for cover to be cheaper for older persons and women drivers. Many companies will not issue classic motor insurance to persons under the age of twenty five, although this is changing as well, and there are some very good providers out there who will cover drivers as young as twenty one.
If the value of the car is not particularly high and the replacement costs of parts and repairs does not warrant a specialist policy, you may well be better advised to seek out quotes from a mainstream insurance company. They often have additional online discounts and offers which the classic policy providers are not in a position to offer.
As with all car insurance, what may initially appear cheap at policy inception could cause some unpleasant surprises when it comes to making a claim. After all you only buy car insurance to protect yourself in the event of a claim and a policy is only as gfood as it's claims service!
Shop around for specialist car insurance and
Compare Classic Car Insurance. Compare prices and insurance covers from both major high street brands and the smaller insurance specialists to ensure you not only get a good deal, but get the adequate levels of cover you require for your classic car, as well.
Original Article Source:
http://EzineArticles.com/?expert=Dave_Healey http://EzineArticles.com/?Cheap-Classic-Car-Insurance-Cover&id=2613741Labels: car insurance, cheap car insurance, cheap motor insurance, classic car insurance, compare classic car insurance
Cheap Car Insurance Could Land You In Jail! or Banned for Life!
LONDON - UK
Car Insurance comparison website Car-Insurance.tv is warning drivers to be very careful when applying for cheap car insurance.......
Car Insurance Fraud has been on the rise in the UK for the last few years.
One could argue disproportionately due to the influx of Eastern European criminal gangs staging road accidents, however the current recession has seen suspected cases of car insurance fraud rise to unprecedented levels, sometimes in very unusual areas.
One worrying factor is the trend to obtain cheap car insurance by 'lying' on the online proposal form or over the phone. Much cheaper car insurance premiums can be obtained by those who lie, omit, or deliberately falsely declare information when applying for cover.
Insurance Blogger has even seen some websites encouraging this type of behaviour!
The savvy public looking to save a few pounds will bend the truth to obtain cheaper premiums as a recent case that appeared before Bridlington Magistrates in Yorkshire demonstrates..
A driver of green Ford Fiesta, a Mr Pears aged 24 of Bridlington was found to have been behind the wheel of his car without valid business insurance and was using the vehicle for business purposes without the appropriate insurance cover in place.
The court heard that when police routinely stopped the vehicle, they noticed that
Pears had a number of insulated pizza bags on the front passenger seat. He explained he had just begun working as a pizza delivery driver on a trial basis that day.
Although he was able to produce a valid insurance policy for the car, a quick search of the Motor Insurance Database by the police officers at the scene revealed that the policy had a usage type of SDP and only covered him for social, domestic and pleasure use of the car and excluded business use, the bench heard.
Pears was fined £525 and had his driving licence endorsed with six penalty points.
Costs of £40 and a £15 victim surcharge were also imposed.
What this goes to show is that if you are caught.. and you will be! Your car insurance for the future will never be Cheap!
Indeed you may not even be able to get cover again once you have commited Insurance Fraud!
It could amount to a lifetime Driving Ban!
Cheap car insurance can be obtained legally by comparing car insurance quotes from many suppliers and by answering the questions truthfully, on one form.
Labels: car insurance, car insurance fraud, cheap car insurance, cheap motor insurance, cover, insurance fraud, Motor Insurance DataBase
Cheap Car Insurance
If you've ever been frustrated when using one of the so called car insurance aggregator or comparison sites, often being sent off to another site and repeating the details you've already typed in - then you'll be refreshed by a new entrant to the market that can provide you with a
cheap car insurance quote and buy in under three minutes.
Specialist car Insurer, Lancaster Insurance, has teamed up with specialist insurance systems company Insuretec Ltd to produce the system that will find you the best deal from over fifty car insurance schemes. Whether you're a young, lady, over fifty, performance car or classic car driver, the site will find you the best car insurance deal available for your needs.
Before you renew check out the site at
Car-Insurance.tvLabels: car insurance, cheap car insurance, cheap motor insurance, motor insurance
