Insurance hikes not because of claims

goz83

https://www.lawsociety.ie/Documents/Gazette/Gazette%202016/Jan-Feb-17-Gazette.pdf Page 11

Picked this up over at the legal forum. Seems that bad investments and management have much more to to with soaring premiums than legal fees and claims. The insurance industry won't release any data for out of court settlements.

Atlantic Dawn

For a product that is mandatory in this country to drive on the road it should be mandatory for them to publish in full every single claim they pay out on.

peteb2

Claims. Investments. What difference? If they aren't making money premiums will always go up .

goz83

peteb2 wrote: »

Claims. Investments. What difference? If they aren't making money premiums will always go up .

It's for the brigade who always come on and blame claims for the massive hikes in insurance. There will always be claims and some are stupidly excessive, but they are not the reason for the hikes and the insurance companies love to have us think it is. We need to get some transparency on this, because after all, motor insurance is mandatory, so we should know the figures. If they can't justify the hikes, then it would be much harder for them to implement them. We would all take to the streets with burning pitch forks :P

Allinall

Why would anyone believe the law society- a vested interest over the insurance industry- also a vested interest?

Claims have a direct impact on premiums.

That is patently obvious.

coylemj

I don't know how much this affects premiums but it should be remembered that insurance companies set aside vast sums of money to deal with future PI claims and typically this money is invested in ultra-safe govt. bonds which in the past few years are paying close to or in some cases below zero interest rates.

So I'd contest the 'bad investment' claim made by the OP because insurance companies don't have much choice when it comes to where they invest their money.

frozenfrozen

why cant I be required to pay money into an insurance fund which appreciates at a normal market rate, so that in 10 years if I have an accident there's a big pot of money to pay it, and a % gets put into a big general fund so that when someone crashes into a bentley it can be paid for. if I claim this year then my fund is in negative and will be repayed over the course of my driving career or something

instead I'm required to fcuk money into a black hole so that I can be uninsurable if I'm ever hit by an uninsured driver who flees the scene

Grolschevik

Allinall wrote:

Why would anyone believe the law society- a vested interest over the insurance industry- also a vested interest?

Because of the Department of Finance report linked to in the first sentence of the article the OP gave the link for.

bazz26

The law society telling us the cost of claims is not a factory in insurance premium hikes is a bit like the SIMI telling us they have the motoring public's best interests at heart.

Between ambulance chasers, a compo culture, higher soft tissue injury payouts and legal fees, etc of course it's a major factor, but it's not the only single major factor. But because the entire industry has such a lack of transparency when it comes to these type of things it's possible to believe who is saying what.

coylemj

frozenfrozen wrote: »

why cant I be required to pay money into an insurance fund which appreciates at a normal market rate, so that in 10 years if I have an accident there's a big pot of money to pay it, and a % gets put into a big general fund so that when someone crashes into a bentley it can be paid for. if I claim this year then my fund is in negative and will be repayed over the course of my driving career or something

If your fund is 'in negative' (as would be the case with young drivers), who is going to pay the compensation if there's a successful claim against you? Are you going to be able to support a widow with young children over the course of your 'driving career'?

What happens if a young driver takes his car off the road though reckless driving, is killed and his passenger ends up in a wheelchair - who pays him?

frozenfrozen

coylemj wrote: »

If your fund is 'in negative' (as would be the case with young drivers), who is going to pay the compensation if there's a successful claim against you? Are you going to be able to support a widow with young children over the course of your 'driving career'?

What happens if a young driver takes his car off the road though reckless driving, is killed and his passenger ends up in a wheelchair - who pays him?

Don't know how that would work, I did say a percentage would go into a central pot that would pay out in situations where the money wouldn't be there in the event you hit a bentley

babi-hrse

This is true.
I had gotten a quote after the big freeze that had Dublin's water not working properly for over two months.
The quote went from 450 to 800 quid
With Quinn direct.
I asked why is it that high
They said due to a high volume of crashes.
I couldn't understand that how many crashes could you possibly have.
The lady told me due to the amount of crashes during the big freeze the premiums went up.
Now when cars drive on ice they drive slow when they do hit things they dent bumpers not write offs
Obviously it was bull****.
I didn't go with the policy and shopped around.
2 months later Quinn direct was shown to have massive debts after basically gambling the money on investments and all had tanked due to the recession.
There's your real reason.

goz83

I posted this thread in the main motors forum, because this issue is so often raised on a daily basis. I didn't post it in the insurance forum, but it has been moved here (without any mod note) and now has about 97% less visibility. I know I never visit this section and I doubt most motors visitors do either. Cheers.

_Brian

goz83 wrote: »

https://www.lawsociety.ie/Documents/Gazette/Gazette%202016/Jan-Feb-17-Gazette.pdf Page 11

Picked this up over at the legal forum. Seems that bad investments and management have much more to to with soaring premiums than legal fees and claims. The insurance industry won't release any data for out of court settlements.

There was a barrister on Mat Cooper on TodayFm sometime the back end of last year speaking along with a representative of the insurance federation of Ireland.
The barrister put it straight to the representative that the policy increases were to claw back money lost in bad investments by insurance companies and it completly stumped the insurance federation Rep, they had no real answer and couldn't deny that vast sums of money were lost by the companies and hikes in policies were inevitable.

wordofwarning

Insurance companies make money from investments. You give them your €400 and they buy bonds etc. When you have negative yields on bonds, insurance companies no longer have that source of income. So when your policy barely was profitable, as insurance is generally sold at cost and you make your margin on the investment income. You no longer have that income, so their prices have to go up

Insurers were getting like 5% on Irish bonds 10 years ago. You can't higher than about 0.9% on 10 year Irish bonds now.

coylemj

babi-hrse wrote: »

2 months later Quinn direct was shown to have massive debts after basically gambling the money on investments and all had tanked due to the recession.

Not exactly the way you describe it.

Quinn as we all know invested huge amounts of his own money in Anglo-Irish Bank which eventually went belly-up because they loaned vast amounts of money to developers and builders and when the property market collapsed, those loans became bad debts on a massive scale.

He then attempted to save his own skin by using the reserves of Quinn Insurance as collateral for his personal debt and by setting up a motor insurance company in the UK to quickly rake in huge amounts of money in premiums by undercutting the local operators. Most large PI claims take several years to work their way through the system so writing cheap motor insurance and under-providing for claims (precisely what Quinn did) is a sure-fire way to generate fast cash flow.

When the UK insurance companies pointed out that his business was unsustainable based on the premiums he was charging, the Irish Central Bank told him to stop writing motor polices in the UK and soon after, they appointed an administrator over his business using the legislation set up after Joe Moore ran PMPA into the ground back in the 1970s.

Purple Mountain

Who puts on the ads on tv about fraudulent insurance claims increasing the premiums of us innocents?
Is there any chance we're been fed propoganda to divert from other factors?
There has been talk in the media of late about insurance companies, what I would call recklessly paying out excessive claims for accidents that would warrant no where near that amount of pay out. Who the hell regulates or doesn't regulate this?

Liam McPoyle

I havnt read the link in the OP but its from the law society so I'm sure its honest, non biased and covers all aspects of why premiums have gone up.

After all, a large portion of solicitors fees / income comes from insurance claims and the higher the claim payment, the higher their slice of the pie so of course they would look at the matter objectively.....

Insurers have to issue their annual accounts through the central bank which details their underwriting profit, as in how much money they make through actually writing insurance business. Even though in 2015 there was an over all underwriting loss ie the value of premiums received was outweighed by claims paid, people still blame the insurers.

I'm sure the law society would be only too happy to let us know how much their members are making from insurance claims.

They have to post detailed annual accounts like insurers do, right?

Right?????

If people believe anything that comes out of the law society about insurance then I'm sorry, they are dumb, pure and simple.

Grolschevik

Rod Munch wrote:

If people believe anything that comes out of the law society about insurance then I'm sorry, they are dumb, pure and simple.

The article was discussing the Department of Finance report linked in blue in the very first sentence. Either people aren't really reading the article or can't be bothered to read the report's conclusions.

Grolschevik

There's another link to the report here:

http://www.finance.gov.ie/what-we-do/banking-financial-services/financial-services-division-2-eu/insurance-policy-and-0