Scary times for premiums

[Dustydog]

An extract from today’s Insurance Times. Makes you wonder who we are paying for now?
“Prices have jumped by more than £100 in the first days of 2022
The cost of motor insurance has risen by more than £100 so far this year due to insurers looking to claw back lost profits following the FCA’s new regulatory pricing reform, which came into force on 1 January 2022, according to The Mirror.
The newspaper reported that a fictional motor insurance quote for a 35-year-old driving a Vauxhall Corsa on 31 December 2021 was £628 per year from Hastings Direct’s telematics arm YouDrive, however this jumped to £728.95 on New Years Day.
Meanwhile More Than quoted £820 for the fictional policy on 31 December 2021 and £989 on 1 January 2022“.

 

[otherclive]

An extract from today’s Insurance Times. Makes you wonder who we are paying for now?
“Prices have jumped by more than £100 in the first days of 2022
The cost of motor insurance has risen by more than £100 so far this year due to insurers looking to claw back lost profits following the FCA’s new regulatory pricing reform, which came into force on 1 January 2022, according to The Mirror.
The newspaper reported that a fictional motor insurance quote for a 35-year-old driving a Vauxhall Corsa on 31 December 2021 was £628 per year from Hastings Direct’s telematics arm YouDrive, however this jumped to £728.95 on New Years Day.
Meanwhile More Than quoted £820 for the fictional policy on 31 December 2021 and £989 on 1 January 2022“.

It is difficult to understand why everyone’s premium has to go up by so much just because new customers do not get the lower attractive premiums. If they had to pay the same as the existing customers it should only be those that pay the higher “ existing” customer rate.

Business practices are hard to fathom. My Norton Security runs out in five days. I’ve been offered an attractive renewal rate of £34.99 for 20 devices for a year. I E desktop, lap top and mobiles. As per normal I did an internet search to see what was available. Norton came high up on a number of sites either No 1 or 2. But the 1 year price was £19.99. So I went onto Nortons chat line and who agreed to price match. Unbelievable price matching their own prices.

 

[Woodentop]

Insurance going up? What about the price of used cars?
My neighbour has a Pug 3008 which he bought about six months ago as an ex-demonstrator with a few thousand miles on the clock for about £27800. The same dealer today has a car identical in every way including age/registration with over 1000 miles more on it and wants £31400!
Eh?

 

[otherclive]

Insurance going up? What about the price of used cars?
My neighbour has a Pug 3008 which he bought about six months ago as an ex-demonstrator with a few thousand miles on the clock for about £27800. The same dealer today has a car identical in every way including age/registration with over 1000 miles more on it and wants £31400!
Eh?

Some pre owned cars have risen 25-30% in price with some more expensive than ordering a new one. But of course new ones are subject to delivery delays and manufacturers are prioritising the higher spec higher profit models. But this is all supply and demand at work, but the insurance increases are solely due to the changes insisted upon by the CMA. I’m sure that when the insurance changes have matured the companies will start to compete against one another.

 

[ProfJohnL]

Presumably the insurance companies cannot now discount policies to new customers, thus they should not be loosing out, in fact their coffers should be fuller, as they are not having to rustle funds from returning customer to fund the discounts for new customers.

 

[otherclive]

Presumably the insurance companies cannot now discount policies to new customers, thus they should not be loosing out, in fact their coffers should be fuller, as they are not having to rustle funds from returning customer to fund the discounts for new customers.

Totally agree your thoughts. I have not seen a logical explanation of why prices should rise. I suspect that it’s riding on the back of the change such that they see a chance for making extra profit while laying the blame on the Government. It’s not just car insurance, it affects home insurance too.

 

[ProfJohnL]

I suspect the companies will claim that general costs a rising due to inflation and other market trends including fraudulent claims like crash for cash, but there is no doubt that as cars become evermore complex they do require more expensive repairs, even for what might seem a minor ding.

 

[Mel]

I wonder if the initial impact of the changes is to reduce competition as there is no incentive to switch for the customers who routinely do so at every renewal. The loyal long term customers were not the shopping around type; so for this year at least the companies think that they have a captive customer base.
How this develops in the future will be interesting. Possibly competition may bounce back as higher prices cause everyone to shop around; on the other hand we may see a levelling out across the market where every product largely costs the same regardless of provider( bit like awnings or fridges 😀).
Mel

 

[RogerL]

The insurance industry is being forced to equalise premiums for new and existing customers - anyone who thought that would be achieved by premiums going down for existing customers is being un-realistic, it was inevitable that premiums would rise for new customers - just like the enforced equalisation of male/female premiums, it was female premiums that went up.

 

[Raywood]

If you changed insurers every year to get the lowest premium you will certainly pay more this year as you were usually getting an unrealistic figure due to them buying in business. You can still use the comparison sites but you will pay more for a realistic quote. These comparison companies will still do you a premium comparison but it will inevitably be for a higher premium. The quotes used do show the saving that could have been made under the old system but the 2022 figures should be what the renewal figures would be last year so it is not the problem they are trying to make out although those who changed every year will be hit but the rest of us will probably pay about the same although time will tell
If you remained with the same company then any increase should be smaller and reflect inflation if anything. If it is far higher then check what others offer. It is in fact possible those who did not change every year will get a slightly lower quote as they no longer have to pay for those who did change and who you were paying for.

 

[ProfJohnL]

......It is in fact possible those who did not change every year will get a slightly lower quote as they no longer have to pay for those who did change and who you were paying for.

Can I hold you to that?

 

[Dustydog]

If you remained with the same company then any increase should be smaller and reflect inflation if anything. If it is far higher then check what others offer. It is in fact possible those who did not change every year will get a slightly lower quote as they no longer have to pay for those who did change and who you were paying for.

That’s me Ray. Ten years same Insurer. Year on year they tried to increase the premium but after a phone call agreed the new premium , usually no more than an extra £5.00. Didn’t work last month. Premium increased by £135.00. Quick call. They insulted me and offered a £5.00 discount.
New Insurer, well known U.K. blue Chip, offered equivalent cover for £25.00 less than my last years premium.👍👍
It is still well worth shopping around. Ensure all the cover is the same , don’t be scared to move.
I suspect there has been a knee jerk reaction by some Insurers. I think it will balance out as they realise losing loyal customers will reduce their profitability. Buying in business is dead in the water 👏👏

 

[Raywood]

Can I hold you to that?

No, we will have to wait and see, but some should.

 

[Buckman]

Our household contents insurance drop by £16 so good news. Car insurance only due in June and caravan in Oct sop a wait and see scenario.

 

[Dustydog]

Our household contents insurance drop by £16 so good news. Car insurance only due in June and caravan in Oct sop a wait and see scenario.

Same Insurer? How about the buildings?

 

[Raywood]

My son in law found he had a £50 reduction in his premiums so it looks like those who did not change last year will get a pleasant surprise in many cases.

 

[Raywood]

Our car insurance with Aviva went up £75 approximately at renewal, when I tried a quote on line it came out a few pounds cheaper, but when I tried a comparison site I saved well over £100 by swapping to General Accident which is in fact part of Aviva. I did ring Aviva but they would not budge so I moved the policy.

 

[Dustydog]

Our car insurance with Aviva went up £75 approximately at renewal, when I tried a quote on line it came out a few pounds cheaper, but when I tried a comparison site I saved well over £100 by swapping to General Accident which is in fact part of Aviva. I did ring Aviva but they would not budge so I moved the policy.

That‘s bizarre. 😵‍💫😵‍💫