Average Annual Premium £440
Where it is spent
Staff and Overheads 26%
Repairs and courtesy cars 29%
Whiplash Claims 20%
Personal Injury less than £500k 15%
Personal Injury over £500k 9%
Uninsured drivers 3%
Theft 2%
Outgoings are 104% of income so running at a loss
Easy to see why whiplash claims are being looked into!
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That of course ignores the kick backs they get from the lawyers and repair garages!
In my experience, the industry has pretty poor systems for managing claims - I'm not surprised that staff and overheads cost so much.
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>>That of course ignores the kick backs they get from the lawyers and repair garages!
Actually no it doesn't. They are accounted for in the 29% which is repairs and replacement cars, and within the claims figures which includes the cost of dealing with them.. Without the "kick backs" then injuries, repairs and cars would be even more expensive.
The 26% on staff and overheads is where at least some problems lie, though.
Last edited by: No FM2R on Fri 15 Mar 13 at 11:38
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More than a quarter of revenue 'spent' on overheads and staff. Wow, so much for private sector efficiency and the benefits of the market, or meerkat..................
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>> Without the "kick backs" then injuries, repairs and cars would be even more expensive.
Sort of.
Without the kickbacks, premiums would be lower. The kickbacks come out of money overcharged to third part insurers - they are all doing it to each other and the effect on premiums is upward.
Insurer-funded accident repair and personal injury claims are very disfunctional businesses.
This isn't just me being cycnical, I am close enough to a couple of industry specialists to know.
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A wise businessman called John Wanamaker once remarked that half the money he spent on advertising was wasted but he didn't know which! I can give him a clue - money spent on Michael Winner and that Welsh opera singer with the corkscrew moustache plus the dire animated one for confused.com
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>>plus the dire animated one for confused.com
Thus proving that it was not wasted.
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No - seen - noted and actively disliked!
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>> No - seen - noted and actively disliked!
Seen and noted is enough. Even if one thinks 'bloomin stupid ad' the firm's name is imprinted.
Only a tiny handful will actively boycott.
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Spot on! I remember, when VAG bought Skoda, an interview with the marketing exec who'd been handed Skoda to work with.
"The reason we bought Skoda is that we have conducted brand surveys around Europe and Skoda has over 90% brand awareness as a car manufacturer."
"Yeeeees, but everyone thinks badly of Skoda?"
"Ah. That's brand perception. I can turn that around with marketing, it's the awareness that's difficult to get.".
What they're after is everyone considering looking for car insurance to think; "What's that site with the Meerkats?".
Last edited by: VxFan on Tue 19 Mar 13 at 10:16
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>>No - seen - noted and actively disliked!
Further repeated, discussed and brought to the minds of others.
And every time you raise the subject of that advert, then you further increase its impact, even if you criticize it.
This is especially impactful from a brand marketing perspective, more so than within specific product marketing.
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>>Without the kickbacks, premiums would be lower. The kickbacks come out of money overcharged to third part insurers - they are all doing it to each other and the effect on premiums is upward.
You've lumped together two different things;
1) "Kick backs" to the insurer are revenue in. Theoretically then lowering premiums.
2) Increasing claims costs are revenue out. Theoretically then raising premiums.
Your assumption appears to be that 2) wouldn't happen if it were not for 1), whereas it could be more probably be seen that 1) is either a wash, or is slightly reducing the overall cost of 2).
It is unlikely to be actually increasing the premiums.
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>> It is unlikely to be actually increasing the premiums.
I thought you might disagree, that's pretty mild for you ;-)
I did lump together two related things. The kickbacks are paid by people who make money from increasing claims.
I posted on this a few weeks ago.
www.car4play.com/forum/post/index.htm?v=e&t=12730&m=285861
I hesitate to mention champerty and maintenance again, though I'm sure I'm not the only person here who knows what they are, i.e. mainly a bad thing.
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>>that's pretty mild for you ;-)
I feel one needs to maintain a contrast; for the sake of clarity if for no other reason.
>> The kickbacks are paid by people who make money from increasing claims
Absolutely and it is an awful system which needs to go away. Nonetheless, its not cause and effect.
What will stop it will be some kind of rule that says that the reimbursable legal fees and/or claim expenses may be no more than £x per hour, with hours to be reasonable and audit-able, and set by level of person who carries out the activities.
As someone above said, might have been you actually, the whole process is inefficient, verging on the dishonest, certainly immoral and needs to go away.
Don't see it happening though.
Last edited by: No FM2R on Fri 15 Mar 13 at 16:22
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Breakdown of UK Insurance Income and Outgoings - Tigger
