Will insurance companies have a good year?

[GT72]

My assumption was that they'll likely have a terrible year with all the travel insurance claims, however, it's likely that motor insurance payouts will drop whilst we're in lockdown. My 3 cars haven't moved for 10 days and are unlikely to move in the coming months, the same as most people I expect. Therefore I presume motor insurance claims must be dropping massively.

As annual motor insurance claims exceed annual travel insurance claims by circa £17.6 billion per annum, a big drop in motor claims could have a much greater impact than travel insurance.

I have no vested interest and am certainly not an expert, so interested to know the thoughts of people with a greater knowledge of the insurance markets than me.

I presume I'm completely over-looking businesses claiming - airlines, travel agents, travel companies, retailers, leisure operators. Do these types of businesses make claims?

[jaisharma]

I pondered the same thing. My non expert thoughts are that motor and general liability claims will fall significantly. The business interruption claims will be few. The real point in my view is how their investments do.

[RoddyKnock_Kieran]

My last insurance payments up on 14th April and i'm looking to put my car insurance on hold as It looks like i'm out of work so micro managing all my money.

Also have the dilemma that Im paying a holiday with TUI due to fly in August (highly unlikely IMO but they are optomistic) but airlines are buying time until 16th April.

Sure you guys have your own dilemmas your dealing with. Fortunately I have no debt

[dmahon]

I switched my insurance to something where it’s insured against fire and theft but can’t be driven. 80% saving with Adrian Flux.

[alfabeat]

From my very recent experience they seem to have wormed away from the majority of the business continuity claims. Which are the painful ones.

Travel insurance claims could be expensive, but no doubt they will try and push back on the travel provider.

Always coming out ok!

I hate insurance companies. Always wriggling out of their obligations.

[Red Leader]

Coincidentally I have just spoken with a fairly senior member of a Motor Underwriting team about this exact subject. His view is that the current situation should result in a good claims year (less vehicles on the road = fewer claims) but on the fleet side whereas a company has say 300 vehicles they are removing up to 80% of them from cover and so a £600k premium last year is being renewed at £150k this year so GWP is down.

It is going to be a strange time!!

[sinbaddio]

Whilst claims will be low currently, there could be a surge when normal service is resumed - I expect absolute chaos on the roads!

[Not as old as i look]

alfabeat said:

From my very recent experience they seem to have wormed away from the majority of the business continuity claims. Which are the painful ones.

Travel insurance claims could be expensive, but no doubt they will try and push back on the travel provider.

Always coming out ok!

I hate insurance companies. [b]Always ensuring that they only pay out for claims that were intended to be covered under the policy
and which were included in the premium calculation[/b]

EFA

[afterparty]

Car insurers will be having parties to celebrate and big bonuses. Most cars haven't moved in last couple weeks.

Spoken to a lot of owners of small restaurants and Pubs, they aren't getting a penny off insurance because the sneaky fu***rs, are classing coronavrius as 'new virus' so not covered.

[dartissimus]

After 13 claim free years, my insurance provider declined to quote on my commercial combined policy.
I've had to move and have just paid 37% more for essentially the same.
Not pleased, but I do think I had been getting a very good deal over recent years.

Good year / Bad year ?.............. It's always a good year for the insurance companies, they just moan more when it's not that good.

[Oldscottishgit]

dartissimus said:

After 13 claim free years, my insurance provider declined to quote on my commercial combined policy.
I've had to move and have just paid 37% more for essentially the same.
Not pleased, but I do think I had been getting a very good deal over recent years.

Good year / Bad year ?.............. It's always a good year for the insurance companies, they just moan more when it's not that good.

I'm afraid you are very wrong:

https://www.ey.com/en_uk/news/2019/12/uk-motor-ins...

Plus of course there are two sides to the insurance balance sheet, assets and liabilities. While there may be some reduction in the cost of liabilities, the negative impact of asset falls might be more significant.

[dartissimus]

Oldscottishgit said:

dartissimus said:

After 13 claim free years, my insurance provider declined to quote on my commercial combined policy.
I've had to move and have just paid 37% more for essentially the same.
Not pleased, but I do think I had been getting a very good deal over recent years.

Good year / Bad year ?.............. It's always a good year for the insurance companies, they just moan more when it's not that good.

I'm afraid you are very wrong:

https://www.ey.com/en_uk/news/2019/12/uk-motor-ins...

Plus of course there are two sides to the insurance balance sheet, assets and liabilities. While there may be some reduction in the cost of liabilities, the negative impact of asset falls might be more significant.

You'll note that I was talking about Commercial Business insurance, where every policy has many factors and features to keep the actuaries busy.
Motor insurance has a only a few factors, car model, post code, drivers age, history and mileage, excess & extras, straight off a table. It's something of a loss leader being the very visible insurance that nearly everyone has, and is often used to gain access to home, life and other insurances

Big Insurance is a calculated risk made by experts who factor in the exceptional events as well as the routine.

They wouldn't do it if it didn't average out on a big plus (set your own timescale)

Far smarter than me, what I pay is me trying to minimise my maximum possible loss for the minimum amount necessary.

[Oldscottishgit]

dartissimus said:

You'll note that I was talking about Commercial Business insurance, where every policy has many factors and features to keep the actuaries busy.
Motor insurance has a only a few factors, car model, post code, drivers age, history and mileage, excess & extras, straight off a table. It's something of a loss leader being the very visible insurance that nearly everyone has, and is often used to gain access to home, life and other insurances

Big Insurance is a calculated risk made by experts who factor in the exceptional events as well as the routine.

They wouldn't do it if it didn't average out on a big plus (set your own timescale)

Far smarter than me, what I pay is me trying to minimise my maximum possible loss for the minimum amount necessary.

Many of the largest car insurance firms are just that car insurance specialists, they don't have other insurance businesses to try and obtain customers for. And where they do, margins on those business lines are not sufficient to fund loss leaders elsewhere. It is a competitive, low margin business line.

Yes, on average, over the longer term the successful firms will make money. That doesn't mean that they don't make losses from year to year (and many firms cease to underwrite new business), converse to your claim about it always being a good year for insurers!

[Groat]

Oldscottishgit said:

banned

tick tock sidicks, tick tock

[Chris Type R]

I've recently paid £200 for annual worldwide travel insurance (for a trip to Orlando). Either the insurance company will make an easy £200 as we'll not be travelling for a year, or they might cover the cost of the cancelled trip - which is unlikely.

[Oldscottishgit]

Chris Type R said:

I've recently paid £200 for annual worldwide travel insurance (for a trip to Orlando). Either the insurance company will make an easy £200 as we'll not be travelling for a year, or they might cover the cost of the cancelled trip - which is unlikely.

Did you check the terms of the insurance policy before you bought it?

[Chris Type R]

No, and I've still not I will if I need to make a claim.

[Oldscottishgit]

Chris Type R said:

No, and I've still not I will if I need to make a claim.

So you don't know if your policy covers what you want it to. Not doubt if you try and make a claim and find out that you aren't covered, you'll blame the insurance company!

[Chris Type R]

Oldscottishgit said:

Chris Type R said:

No, and I've still not I will if I need to make a claim.

So you don't know if your policy covers what you want it to. Not doubt if you try and make a claim and find out that you aren't covered, you'll blame the insurance company!

The objective was not to insure myself against a global pandemic specifically - just the normal holiday stuff. I skimmed the T&Cs but did not inspect overly closely for get-out clauses/ambiguous wording. I'm not sure you know me well enough to assert that I'll blame the insurance company

[Oldscottishgit]

Chris Type R said:

The objective was not to insure myself against a global pandemic specifically - just the normal holiday stuff. I skimmed the T&Cs but did not inspect overly closely for get-out clauses/ambiguous wording. I'm not sure you know me well enough to assert that I'll blame the insurance company

Fair enough, in which case I've no idea the point you were trying to make.
It is either certain that they will cover the cost of the trip if the cancellation is within the terms of the policy, or it is certain that they will not cover the cost of the trip if the cancellation is not within the terms of the policy.

Edited by Oldscottishgit on Sunday 5th April 18:52