Axa Motor Insurance accepts that drivers text while at the wheel

[GrumpyGregry]

Of course, given that vehicle insurance payouts were far greater than income from policy payments in 2010 should we really not be asking about he wisdom of a 90% discount?

2 billion pounds was diverted from household and other insurance to prop up the motor insurance...........why should householders subsidise any driver's insurance no matter how safe they are

Because insurers are in cahoots with govt. Because insurers look at personal lines in the round. Because insurers hardly ever make money from underwriting once the claims are settled. Motor insurance is a legal requirement, household isn't, and the MIB picks up the tab for uninsured drivers so the whole industry is rather uninterested in raising premiums beyond the level the market will bear. No one sane wants masses of uninsured drivers on the road.

and no, if they can't get insurance they aren't going to stop driving. Until 3rd party insurance is levied via a duty on fuel we are lumbered with a broken system, where someone, be it householders or drivers like me with a currently claim free record*, subsidise the idiots.

I've owned my cheap to insure car for four years. This year I will have paid insurance premiums which, in total over four years, exceed the price I paid for the car.

 

[srw]

Because insurers are in cahoots with govt. Because insurers look at personal lines in the round. Because insurers hardly ever make money from underwriting once the claims are settled. Motor insurance is a legal requirement, household isn't, and the MIB picks up the tab for uninsured drivers so the whole industry is rather uninterested in raising premiums beyond the level the market will bear. No one sane wants masses of uninsured drivers on the road.

Sorry Greg - that's an odd mixture of the absolutely accurate and the plain wrong.

The insurance industry certainly isn't in cahoots with the government, and the sensible companies want to make money out of every business line individually. No-one can raise premiums beyond what the market will bear (the motor insurance market is one of the freest and most competitive that exists in this country - if you're not the cheapest or close to it you won't get the business), but the sensible companies would love to find a way to charge an appropriate premium.

And I'm sure you know that, even as a relatively venerable driver driving a small car not very many miles you still expose your insurer to the risk of a very large payout, tens of thousands of times your annual premium.

 

[GrumpyGregry]

Sorry Greg - that's an odd mixture of the absolutely accurate and the plain wrong.

The insurance industry certainly isn't in cahoots with the government, and the sensible companies want to make money out of every business line individually. No-one can raise premiums beyond what the market will bear (the motor insurance market is one of the freest and most competitive that exists in this country - if you're not the cheapest or close to it you won't get the business), but the sensible companies would love to find a way to charge an appropriate premium.

And I'm sure you know that, even as a relatively venerable driver driving a small car not very many miles you still expose your insurer to the risk of a very large payout, tens of thousands of times your annual premium.

Things must have changed since I was in the industry. But somehow I doubt it....

Who makes consistent profits from underwriting these days and in which lines of business? Genuinely interested. In my day the treasury function and their investment strategy was what put us in profit; grab the cash from the cash cow punters and hope you can turn a decent buck on it because losses, short-tail and long- will wipe the floor with your premium income. Has the model changed, or actuarial efficiency seen transformation in profit generation from underwriting?

According to an ABI report I read ?last year? consumer inertia, on a par with energy markets, from the great mass of non-claming insureds is the biggest factor in customer retention in UK personal lines, with whole marketing strategies designed to keep it that way, so it is only a free market for the small percentage who shop around each year surely?

and like all City financial services I'd say cahoots is a reasonable way to describe the relationship with government.