I'm sure some of the prices are just plucked out of the air at random.
To be honest, I was quite satisfied with the renewal price that came through the post from Direct Line as it was only a small increase of £15 from last years price, but thought I'd look round anyway to compare other prices.
Last year with DL was £364. This year £379.
Tesco wanted £370.
Churchill wanted £670. What!!!!! This the same group of insurers as DL. How can it be £300 more????
Thought I'd then give DL a call, as prices change frequently.
They gave me a new quote of £329, which was £50 cheaper than their postal quote, and £35 cheaper than last year.
Bonkers isn’t it?
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I moved from LV= to Direct Line in January. In spite of a claim last year when LV wrote my Roomster off DL were massively cheaper, well over £150.00.
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I have been getting quotes 25% - or more - greater than last year. I switched one car from LV to Sainsburys a couple of weeks back.
The other car insurance requires renewing in September. I shall be very interested to see what LV have to say this time.
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>> Churchill wanted £670. What!!!!! This the same group of insurers as DL. How can it
>> be £300 more????
Because their risk book needs to be balanced, and they are constantly tuning it by pricing you and your risk profile in or out as required
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2 years ago a son was with Esure and paying £300, renewal £430, goes to Aviva £260.
Aviva this year was nearly £400, so back to Esure at around £300. It's a 4 year old 320d auto xdrive - 3 pts but aeons of NCB years.
His younger brother pays around £450 for a newish RS4 Avant via Sainsburys as on trading in a Discovery the then insurer wanted £850 / year.
Surely insurers should be pricing against risk rather than a wet finger in the air!
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Martin Lewis did some analysis and found that quotes even with the same company varied by day.
I forget the actual figures but it was sort of an inverse bell curve for the 31 day quote period with 31 to 22 days reducing in price to an optimum point of 21 days before renewal and the getting more expensive as renewal date approached with the evening before renewal being the most expensive.
Can’t find the article at the mo as I’m on my mobile.
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Motorcycle insurance from Carol Nash earlier this month. Spoke to them on the phone which I prefer to do and was given a quote of £276. When I pointed out to the call handler that the reason I phoned was because I had filled out their online proposal with exactly the same info and it came to £83 she asked me for the reference number, tapped a few things into her computer and said, "Yes, I can do that".
I can understand a small premium for not going online, but nearly £250! Non internet users don't realise how expensive not being online is.
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>> I can understand a small premium for not going online, but nearly £250! Non internet
>> users don't realise how expensive not being online is.
>>
A reasonable admin free for phone quotes would seem to be acceptable, say £15 or £20 to cover extra overheads but that's not a premium it's a mugging and thoroughly dishonest, suggesting the company does not deal with its customers fairly and goodness knows what they would be like when you needed them.
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>>and thoroughly dishonest,
How so?
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>> >>and thoroughly dishonest,
>>
>> How so?
>>
Same product. Purchased over the phone for £276, purchased over the web £83. It might not be illegal but its certainly sharp practice.
And in comparison, our managers oblige us to tell customers the lowest cost method of business transactions with us. For example batching BACs transactions to save the batch processing fees each time.
Same as getting the renewal quote for £400 but online the same insurance is £250 from the same company.
I know there is no customer loyalty in insurance but the market has brought that on itself.
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To be fair Zippy, the banks are probably cautious because of the vast sums they've had to shell out for previous mis-selling...!!
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>> >> >>and thoroughly dishonest,
>> >>
>> >> How so?
>> >>
>>
>> Same product. Purchased over the phone for £276, purchased over the web £83. It might
>> not be illegal but its certainly sharp practice.
So, not actually dishonest at all.
>> And in comparison, our managers oblige us to tell customers the lowest cost method of
>> business transactions with us.
Out of the goodness of their hearts?
>> Same as getting the renewal quote for £400 but online the same insurance is £250
>> from the same company.
There's no dishonesty, just commercial decisions.
>> I know there is no customer loyalty in insurance but the market has brought that
>> on itself.
Quite the contrary.
When I was in claims account was taken of how long a customer had been a customer, the spirit and intention of the claim, the fairness of the circumstances etc. etc.. As a result companies like Sun Alliance, GAFLAC, GRE, Eagle Star, Cornhill and others paid out where strictly they didn't have to because that was their market segment - quality.
And then along came the Lloyds syndicates, primarily in private motor, driving down prices (a good thing) but changing behaviour. Instead of good service retaining a customer for years, customers began to move for pennies. Thus the composite insurers had to start cutting costs out of their business.
Bang when generous claim handling and in came more and more efforts to get as much revenue as possible while keep relevant premiums down. And by and large relevant premiums are the first ones, not renewal premiums.
Most people's objections to insurance companies come when the company sticks to the rules or follow their legally compelled behaviour of increasing revenue, profitability and market share.
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I wonder if you stopped laypeople in the street and asked if a company sold a policy for £80 odd quid on line and £250 odd over the phone, if it was fair and equitable or a bit of a con and therefore dishonest, I expect you would find the majority would suggest that it was a bit of a con and dishonest.
I think we are just going to differ on our opinions here.
Last edited by: zippy on Fri 29 May 20 at 04:32
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>>I think we are just going to differ on our opinions here.
I think if you are going to stop random people in the street and use them as your metric, then yes we are.
How are you, by the way? On the mend?
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>>on the mend..
Yes good thanks. Back at work (from home) but cant sleep - up 20 to 22 hours a day.
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Can't sleep, and so knackered. Or don't need to sleep so very very bored?
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Mostly can't fault your points except
"Bang (went) generous claim handling and in came more and more efforts to get as much revenue as possible while keep relevant premiums down."
So what you maybe meant to say is that, going back many years the insurance companies used to take note of loyalty, but they (probably) don't now because of having to up their game?
I'm not trying to be smartt or picky but that's something I've really noticed with utility companies, in particular Virgin Media with whom I've had my TV and internet service for years - I won't go into the issues as they are too boring but they used to be really helpful and cooperative (i.e. accede to my maybe unreasonable requests) but now I feel like just I'm another Joe to them. WHich I always was but they are definitely more difficult to work with.
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>> I'm not trying to be smart or picky..
I typed it badly. More concisely Insurers moved from a quality of service sensitive market to a price sensitive market and thus removed everything quality of service oriented to reduce the price.
This changed their claims handling generosity, introduced admin fees, cover breadth and many other things. Very similar to why a cheap airline charges you for peanuts rather than including them in a quality service.
>> they used to be really helpful and cooperative
Both of which cost money, none of which they can recover from higher, quality oriented, pricing.
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They are not the same products. One transaction Is via the internet, the other via the phone.
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>> They are not the same products. One transaction Is via the internet, the other via
>> the phone.
>>
They are, just the purchasing method is different.
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They clearly are not as the purchasing method is different, you said so yourself. Fulfilment by a different channel means it is a different product. The channel or route to market is integral to the product. Thats why Netflix is here and Blockbusters isn't.
I think what you may be referring to is channel conflict or overlap, where the route to market is not sufficiently isolated. That is why I get fed up with "introductory offers" by people like BT, as well as insurance companies, when they seek to charge me more for an element of the offer than they do for new customers.
Consumers may not like it, but it is a legitimate tactic even it doesn't engender loyalty. Not that Michael O'Leary has ever worried about loyalty and it doesn't seem to have held him back.
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Sorry Lemma, if I buy a tin of beans from Sainsburys on line or a tin of beans from Sainsburys in store its the same product at pretty much the same price. There may be a small charge for delivery but its not well over £100!
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My point is that the core element, tin of beans/ insurance etc, is one element that it is only one of the components of what constitutes the product. The channel or route to market is not in addition to “the product” it is integral to the product and inseparable from it. Take a look at Neil Borden’s 1964 paper on the marketing mix. It’s probably on google (if not try McCarthy’s) he explains it much more elegantly than me.
If a company can’t differentiate, that is to say make their product offering more attractive, on the basis of the nature of the beans or the extent of the cover, then it is possible to do so by means of the channel, typically characterised by the ease of availability.
Hence is it easier to go to Sainsburys to buy your tin of beans, or to sit in your front room, poke around on your tablet and have Sainsburys deliver it to you? If you consider it is more convenient then would you pay more for it, if so how much? If I, as Sainsburys or LV or whoever, consider that premium to be a few pounds then I can maybe improve my margin if you accept my premium price. If I price it too high then you don’t and I lose out.
The level of pricing of various product offerings is a managerial judgement. Managers are people, maybe they get it right or wrong. Perhaps sometime they have objectives of which we are unaware, and therefore their decisions do not make sense to us. Welcome to life.
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>> Surely insurers should be pricing against risk rather than a wet finger in the air!
Its far from wet finger in the air, its a mix of profitability, market forces and risk book ratio. If they dont want your risk profile they will price you away. And dont forget most of them are only brokers.
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As others have said, car insurance pricing is very dynamic these days. Part of my work in the late ‘90s involved car insurance, albeit as part of a wider portfolio of insurance for a specific customer group. We had a Rating Guide in a lever arch file and every few months, a new set of pages (rates) would arrive if the insurer needed to amend the rates - pretty much back of a fag packet stuff, where I’d follow a flow chart in the guide and manually work out a premium on a scrap of paper!
Nowadays, the main car insurance providers will be tweaking their pricing and acceptance criteria almost in real times. It probably does feel a bit ‘finger in the air’, but there’s a lot (probably too much!) science and data to it. In theory, an increasing frequency of ‘cash for crash’ type staged accidents in a given location could increase the quoted premiums for everybody in that locality, even if they are free of claims. It’s all about probability.
Last edited by: Mr Moo on Thu 28 May 20 at 20:40
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Unfortuantely, both of our car's insurance reneals fall on June 1st. Every year, I save as PDFs, the results page of comparethemarket, cofused.com etc... on my computer in a folder structure going back to 2012.
This year it went up around 20% on the renewals and about 10% on the comparison sites, this is despite some insurers giving partial refunds due to COVID-19 lockdown and reduced numbers of claims. You would think they would all have had a good year? Maybe they invest the premiums on the markets and they have not done well recently.
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>> on the comparison sites,...
Apparently they can make over 20% commission on your premium, with some studies claim that they are effectively pushing the true cost of insurance up.
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Last year I paid LV= £275 including all the extras except for breakdown cover, this year they wanted £306, I rang them as I now wanted to included a mid level of breakdown/recovery cover, I then did something I've never done before and asked the nice lady on the phone if this was their best price... she goes away for less than 30 seconds and takes off £25.
New total price £303 virtually back where I started but with all the extras.
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>> the main car insurance providers will be tweaking their pricing and acceptance criteria almost in real time
I've read that the cheapest prices are obtained by buying insurance on a Tuesday 3-4 weeks before the renewal date. I can only assume the historic claims levels of customers who buy in this way are lower. There are many, many other criteria to be taken into account: email provider was an interesting one.
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There was a report in the press a couple of years ago that quotes using a Hotmail email address got a higher price than if using Gmail.
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for the simple reason the hotmailer was fishing with little intention of buying.
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As usual I ignored the advice to seek renewal quotes 3 weeks before expiry of the policy.
My renewal price, with Coop insurance, had dropped from last year with same conditions. As an IAM RoadSmart member for ten years they offer competitive quotes ( normally) with Cornmarket and they are always worth a call.
I got the cheapest renewal price through a single comparison site...fairly basic cover, no legal aid or breakdown cover, single driver, limited mileage for social domestic and pleasure, protected NCD and the car is kept in the garage. Y Dales postcode helps!
£224 fully comp, and at that price I can’t be assed spending time chasing cheaper quotes.
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IAM RoadSmart membership costs me £37pa.. includes a 3 yearly driving assessment should you wish.
A friend of mine is an ADI so I’m sitting my ‘normal’ driving test again with him as soon as circumstances allow.
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My mother in law's insurance is due, with a renewall of £801 for a lady in her late 70s, driving a 2015 Ford Ka. No claims etc etc. She's been with the same insurer since 2015, when the premium was £405. It's increased year on year and she's finally asked me to look for cheaper insurance as she felt £800 was unreasonable. I'd flipping well say so! 10 minutes work produced a quote with the same terms - £324.
She's not renewing with her present insurer.
Last edited by: Dieselboy on Fri 5 Jun 20 at 16:14
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Varying car insurance prices - Bromptonaut
