Why Do Insurance Companies Do This?

[Quinny]

The initial message was deleted from this topic on 19 October 2011 at 14:06

[RUSSELLM]

Its the only way they can increase their profits with you.They all do it I'm afraid.

I'm currently trying to work out why our van insurance has gone up every year, whilst our no claims discount has gone from no years to four years, and the van's value has dropped from £14k (new) to £4k (second hand)

Motor insurance = Dutch auction

[v8 kieran]

My insurance lapsed this morning. Renewal quote came in at over £750 from previously very competitive insurer known to all TVR owners. "How much?" I exclaimed on the phone - that's alot more than last year. Oh, just a minute....... that's a mistake, don't know how that happened - should be £540!
"Iam sure you would have refunded me the over charge once you discovered this for yourselves....." Er of course. Yeah right - Now changed to Peart, who offer instalments as well, with slightly cheaper price.

I think the best way to keep 'em on their toes is to change every year if you can do it competetively......

[anniesdad]

I'm still amazed that insurance companies employ actuaries to set their rates! Why the hell bother, when you might as well just go out buying the business.

[v41ley]

Essentially it's down to customer inertia with insurance, banking etc. Most customers will accept the renewal figures and are not pro-active to seek a lower premium especially if thye blurb says they are getting a competitive quote. (Although, I work in the mobile phone industry which is very different when customer's come to upgrade their handsets). If you were in business why give money away when you don't have to if you can get away with it !!!!

[basil brush]

And it sounds like you are talking about a broker rather than an insurance company so I guess they are buying and selling like any other business. They quote a price, you find the product cheaper elsewhere, they offer to price match.