Motor insurance firms record €330m profits

Sarsfield

So says the Financial Regulator

http://www.rte.ie/news/2005/0915/insurance.html

How many vehicles are there on the roads? How much profit per vehicle? I'd love to know the profit margin. I know insurance rates have fallen but it seems there's a lot more room for reductions in charges.

I have no problem with profits but this looks excessive.

HelterSkelter

They are totally cleaning up. Check out this link:
http://www.mijag.com/press/press_bluebook2004_01.asp

You can check out the full report here:
http://www.financialregulator.ie/data/in_ins_files/Final%20version%20Statistical%20Review%2004.pdf

Look at table 15, that's the relevant one for motor insurance.

LFCFan

They raised their premiums when claims were very high but then did fcuk all to reduce the premiums when claims reduced, thus generating massive profits. They are screwing us over big time and of course the Government just sits back, taking it's 2% and doing nothing to protect the customer. It makes me laugh then when you get a renewal notice that's way higher than other companies are quoting and then tell you they can't 'afford' to bring the price down any more. That are raking in so much money that they don't care if they lose customers. If margins were tighter they'd do a lot more to keep their current customer base.

ambro25

It is just like in the UK (but the Rip Off is on a much grander scale in a much smaller market) -

[init_conspiracy_theory_mode]

(i) with computerisation, it isn't such bother to lose a customer off the books or put one on, as all insurers really need to do is input your name, postcode and car mileage, since address and car data already exists in database and the computer calculates the premium anyway.

Say your premium at time T0 is €500.

(ii) so, at renewal, just slap an extra €100 or more on the premium and push the existing client out to other insurers.

Customer gets quotes. It's a year on, customer and car have not changed, but Mr Insurance and shareholders want more (to be said in Oliver Mode). Cheapest quote found is €550 (cheaper than renewal @ €600, but still 10% more year-on-year). Now, our customer is quite pro-active for an Irish person, and goes to the bother of changing insurance to save €50. So, premium at time T1 is €550.

(iii) back to (ii) above. etc. So, premium at time T1 is €600.

and so on and so forth...[\init_conspiracy_theory_mode]

You may laugh - but I have yet (as a UK then IE-insured driver) to see a decrease in my premiums over the past 8 years or so, with no claims whatsoever AND shopping around everytime the renewal premium went up by so much as a pound (£). Draw your own conclusions.

HelterSkelter

Not only have they increased their profits, but all the time they are "hiding" even more profits by increasing their reserves (the amount on money they set aside to pay out for claims). In 2000 the amount in reserves was roughly 2.5 times the claims paid, now it is over 4 times. They have stashed an extra €1.5 billion in the reserves in the last 4 years.