To think that car insurance has gotten to be a scam

[MaloneMeadow]

Tell me in what world is it reasonable that I’ve just paid £4500 for my (very sensible) DD’s first year of insurance, whilst DM’s 80 year old best friend is still tootling around with severe eyesight issues and dementia, having a near miss on a daily basis yet paying next to nothing insurance wise! Absolutely scandalous that the government are sitting back and allowing the horrendous price gouging currently going on with car insurance in the UK.

Feistas and other small hatchbacks have always been driven by inexperienced drivers and are sometimes stolen too, no surprise with 1.5m of them on the roads, yet just 5000 were stolen last year.

You seem perfectly happy to pay super high insurance premiums & doubtless everything else too, without ever questioning why.

My nieces both drive Fiestas although ones learning. The older one has a Fiesta that's 10 years old & the insurance has gone up this year to £720 - she's 19

Not sure where you're getting that conclusion from, are you mixing me up with another poster?

I never pay any insurance without making sure I'm getting the best value for money but as I have no influence over other drivers, the cost of car repairs, medical payout scams or any other factors that dictate insurer algorithms I have to accept that premiums are increasing

Google tells me that according to What Car Fiestas were the most stolen car in 2023, just under 6000, I've no reason to doubt their research but happy to reconsider if your figures are from a more reliable source

Even at 5000 it's more than the next two added together

Inspired by something written by Caroline Criado-Perez a while ago, I read a RoSPA report on road traffic incidents in the UK. 95% of serious accidents were caused by men behaving dangerously or carelessly, usually due to over-confidence in their own abilities. The old situation, where women had cheaper car insurance than men, was not based upon discrimination but upon hard data. Women are being discriminated against now and not rewarded for their safer driving.

I find it really hard to believe that insurance companies are not making profits. Why would they exist if they’re not making a profit.

Unfortunately I’m guessing so many people that are tied into having a car to get to their jobs, children’s schools etc.

See also utility companies, food shopping etc etc etc

I am guessing if they wanted to the government could intervene re. Cost of living…..

If they can make such schemes as ‘eat out to help out’ anything is possible isn’t it :)

@inabubble3

I find it really hard to believe that insurance companies are not making profits. Why would they exist if they’re not making a profit.

You could have just looked at the - independent - links posted earlier in the thread regarding the unprofitable motor insurance sector.

I find it really hard to believe that insurance companies are not making profits. Why would they exist if they’re not making a profit.

They don't make a profit on it, by and large. Those that still offer car insurance do so because drivers have to have insurance by law. The companies use it as a way to acquire customers and then market other, optional, forms of insurance to them. It's a loss leader.

This is from Forbes, the financial website.

"Despite the size of the market, most insurers make a loss on their motor insurance underwriting operations. Instead, they make profit in other areas by offering their policyholders additional services such as home, travel or pet cover, says trade organisation, the Association of British Insurers (ABI). "

https://www.forbes.com/uk/advisor/car-insurance/car-insurance-statistics/#:~:text=Despite%20the%20size%20of%20the,of%20British%20Insurers%20(ABI).

I find it really hard to believe that insurance companies are not making profits. Why would they exist if they’re not making a profit.

Many providers nowadays are, essentially, investment businesses with insurance sidelines. They remain in business through a fine balancing act of divestment of risk and class in their portfolios, keeping their solvency capital requirements as low as possible by endlessly reviewing actuarial models for reserving on their liabilities, and on profits from investment of premium. They don’t make money from selling car insurance.

Stricter regulation, particularly in the Lloyd’s market, when it comes to solvency capital, capital ratios, and assessment of operational resilience is one of the many reasons for increase in premium, as providers can no longer operate under the lean capital structures many used to - and the government has no appetite to deregulate the industry, quite rightly.

I never understood this, as insurance is based on a complex risk matrix. Did they take sex out of it completely?? How ridiculous and unfair.

Including sex in the matrix became difficult to defend when considered in the context of other protected characteristics. Should insurers be able to ask customers about their race, sexuality or any health condition in case this makes a difference to level of risk? It may be that e.g. Asian people, bisexual people and people diagnosed with anxiety are more likely to have accidents - we just don’t know because that data isn’t collected, but I doubt anyone would want to argue that it should be.

Pricing data shows that women as a group still pay lower premiums than men as a group: female drivers generally drive fewer miles, are less likely to drive for business, have lower value cars, have fewer major accidents on the road and make fewer high value claims, so are automatically rewarded with lower premiums regardless.