Big profits at 17 insurance companies... Or is there?

the_syco · 14-06-2019 7:23pm

GreeBo wrote: »

Why wouldnt it happen?
If all the details of their company accounts are laid public then the biggest insurer win by undercutting the rest and driving them out of business.

But they're not undercutting each other. If anything, they're trying to charge you as much as possible.

GreeBo wrote: »

Do those business all publish the details of their costs, margins, etc?

If I asked a company why it was charging me X for something, they'd tell me. If someone asked the insurance company why they're raising that someones insurance, even though they have never crashed their car in their 30 years of driving, the insurance company wouldn't tell them.

lalababa · 14-06-2019 8:01pm

Allinall wrote: »

lalababa wrote: »

Car insurance is compulsory. But what exactly is insurance and by extension car insurance?
For example, a mate of mine who had an older car but in exceptional condition eventhough it went on fire ...ha..ha... called the fire brigade. Car was a total loss. Rang insurance company. Company said they would give book value of car (1000) + 700 for fire brigade. Great huh! But his premium would rise by 500 next year and stay that way for the next 4/5 years!
So he didn't claim, he took the 1700+ hit so he could stay on their good side.
Soooo what was the insurance for?? Didn't do him any good did it?

What if your friend had a momentary lapse of concentration and the result was an accident causing life changing injuries to a third party?

The court decided that the third party would need round the clock care for the rest of their lives, and awarded them €3M in compensation.

Would your friend have been able to take that hit?

I give up, I really really do. So car insurance now is only if you brain somebody and it costs 3 million to spoon feed them? Talk about whatifery. What's fire & theft car insurance for? Is that still for brain injuries?? I think you should get a bit of a pay out yourself if ya get my meaning.

c.p.w.g.w · 14-06-2019 8:07pm

suicide_circus wrote: »

how are you still on a provisional licence? thought they were gone years

Sorry learner permit

Allinall · 14-06-2019 8:18pm

lalababa wrote: »

I give up, I really really do. So car insurance now is only if you brain somebody and it costs 3 million to spoon feed them? Talk about whatifery. What's fire & theft car insurance for? Is that still for brain injuries?? I think you should get a bit of a pay out yourself if ya get my meaning.

Lack of knowledge leads to personal abuse.

GreeBo · 15-06-2019 7:55am

the_syco wrote: »

But they're not undercutting each other. If anything, they're trying to charge you as much as possible.

They are running a for profit business.
I said they would undercut if everyone had access to everyone elses company details.

the_syco wrote: »

If I asked a company why it was charging me X for something, they'd tell me. If someone asked the insurance company why they're raising that someones insurance, even though they have never crashed their car in their 30 years of driving, the insurance company wouldn't tell them.

What would they tell you? Possibly their wholesale costs, they wouldn't tell you what the MD was being paid or how much of the price was covering the rent on their shiny new premises.

They charge what the market will pay, same as everyone else...unless you are accusing them of being a price fixing cartel?

Boggles · 15-06-2019 9:10am

GreeBo wrote: »

They are running a for profit business.
I said they would undercut if everyone had access to everyone elses company details.

The big players in the market all ready pool data.

GreeBo wrote: »

unless you are accusing them of being a price fixing cartel?

That would be the EU and several politicians, not just him.

15-06-2019 10:10am

Quite a good summary /review here. The 1300% profit surge headline seems very misleading.

https://www.irishtimes.com/business/financial-services/little-evidence-that-insurance-price-gouging-has-returned-1.3926095

"It’s true that 17 general insurers saw their profits surge 1,300 per cent in 2017. But it was off a base of €16 million for 2016. And €101 million of the €227 million profits came from income made from investments rather than insurance.

Twelve Insurance Ireland members surveyed for its Factfile 2017 made a combined €31 million profit on motor coverage - an average of €2.58 million each. The return to profit in this business followed four years in which the industry racked up €757 million of losses.

These losses forced the likes of FBD to raise cash from asset and bond sales, and RSA Insurance Ireland to secure a bailout from its UK parent, to ensure they had enough money in reserve to meet regulatory demands and payouts on claims. Policyholders, remember, are paying an annual 2 per cent levy for the failures of Quinn Insurance, Setanta and Enterprise Insurance so far this decade.

The return to profit in 2017 came after a 70 per cent surge in motor premiums over a three-year period to late 2016. It followed a period during which the industry failed to properly price risks being taken on – and soaring court awards.

Household insurance, on the other hand, was profitable for the third successive year in 2017, delivering a healthy €46 million. The case was similar for commercial property.

However, employers’ liability and public liability lines made a combined loss of almost €47 million in 2017, resulting in a negative overall result over five years."

Boggles · 15-06-2019 10:37am

1641 wrote: »

Quite a good summary[/I]

It really isn't. It's based on data "volunteered" by the industry.

1641 wrote: »

The return to profit in this business followed four years in which the industry racked up €757 million of losses.

The return to profit in 2017 came after a 70 per cent surge in motor premiums over a three-year period to late 2016. It followed a period during which the industry failed to properly price risks being taken on – and soaring court awards.

It gives a headline figure of €757 millions losses without breaking down why these loses incur, the link is fire walled so does it mention the billions in profit proceeding those loses?

It blames the loses on not charging appropriately (their fault) and "soaring court awards" - absolutely no evidence of this of course as only 5% of claims get near the courts and the vast majority of these are settled on the steps of the court house.

The actual real reasons they racked up loses was because of bad management, bad investments, soaring broker and management fees and not having adequate liquidity.

Of course you won't get the propaganda wing of the industry to admit this, far easier shout "whiplash", "fraud", etc.

15-06-2019 11:06am

Boggles wrote: »

It really isn't. It's based on data "volunteered" by the industry..........

It blames the loses on not charging appropriately (their fault) and "soaring court awards" - absolutely no evidence of this of course as only 5% of claims get near the courts and the vast majority of these are settled on the steps of the court house.

The actual real reasons they racked up loses was because of bad management, bad investments, soaring broker and management fees and not having adequate liquidity.

Of course you won't get the propaganda wing of the industry to admit this, far easier shout "whiplash", "fraud", etc.

It is based on the same data as generated the 1300% headline.

So undercharging is "their fault" and not undercharging is "their fault" also?

Setttlements outside of the courts are based on avoiding legal fees, one of the biggest drivers of costs. Even a small settlement can result in disproportionate legal costs.

I would be surprised if there aren't some issues in the insurance industry driving costs. But the biggest ones (in no particular order) are

Fraudulent claims
Vexatious (but not fraudulent) claims. Just because you can claim doesn't mean you should. Accidents happen everywhere. If you fall at home do you sue yourself?
Ridiculous awards (driving both of the above)
Ridiculous legal costs.

Boggles · 15-06-2019 11:13am

1641 wrote: »

Setttlements outside of the courts are based on avoiding legal fees, one of the biggest drivers of costs. Even a small settlement can result in disproportionate legal costs.

Okay so, show your works, show how legal fees are one of the biggest driver of the premiums we paid in the past 4-5 years?

Let me get a pencil.

15-06-2019 11:44am

Boggles wrote: »

Okay so, show your works, show how legal fees are one of the biggest driver of the premiums we paid in the past 4-5 years?

Let me get a pencil.

" AIR, which represents businesses and charities hit by premium hikes, said legal costs have become an obstacle. Director of the lobby group Peter Boland said Government reports have found legal and other charges add an additional 42pc to 45pc to injury awards.
A Department of Finance report last year stated that on a €100,000 payout there is another €42,000 in legal costs.
The department reported that injury compensation of €100,000 would result in an average of another €24,900 to cover claimants' legal and other costs. An additional €17,200 paid the insurer's overall costs.
Mr Boland said that if an injury case is settled through the Personal Injuries Assessment Board, the delivery costs (legal and other experts) amount to 6pc of the award. The assessment board generally does not pay legal costs.
"However, if the award is rejected by the plaintiff and the case goes to court, then the percentage taken by the legal profession and other experts rockets to 45pc, according to the Government's 'Cost of Insurance Working Group' report," he said.
Mr Boland added the threat of costs at this level for a defendant, facing a plaintiff who has a 'no-foal, no-fee' solicitor, forces many defendants and their insurers to accept what were manifestly unjust settlements. This was preferable to the risks associated with a court case."
https://www.independent.ie/business/personal-finance/latest-news/law-costs-blamed-for-escalating-insurance-premiums-37094307.html

Boggles · 15-06-2019 11:50am

1641 wrote: »

" AIR, which represents businesses and charities hit by premium hikes, said legal costs have become an obstacle. Director of the lobby group Peter Boland said Government reports have found legal and other charges add an additional 42pc to 45pc to injury awards.
A Department of Finance report last year stated that on a €100,000 payout there is another €42,000 in legal costs.
The department reported that injury compensation of €100,000 would result in an average of another €24,900 to cover claimants' legal and other costs. An additional €17,200 paid the insurer's overall costs.
Mr Boland said that if an injury case is settled through the Personal Injuries Assessment Board, the delivery costs (legal and other experts) amount to 6pc of the award. The assessment board generally does not pay legal costs.
"However, if the award is rejected by the plaintiff and the case goes to court, then the percentage taken by the legal profession and other experts rockets to 45pc, according to the Government's 'Cost of Insurance Working Group' report," he said.
Mr Boland added the threat of costs at this level for a defendant, facing a plaintiff who has a 'no-foal, no-fee' solicitor, forces many defendants and their insurers to accept what were manifestly unjust settlements. This was preferable to the risks associated with a court case."
https://www.independent.ie/business/personal-finance/latest-news/law-costs-blamed-for-escalating-insurance-premiums-37094307.html

When you get a chance could you actually answer my question. Here it is again.

Boggles wrote: »

Okay so, show your works, show how legal fees are one of the biggest driver of the premiums we paid in the past 4-5 years?

Motor premiums went up 70%, where is the data that says legal fees went up the same amount or similar?

Again no one is suggesting legal fees are not high, but only 5% of cases make it to court, with the vast majority of these not been decided by a judge or being in excess of 100k.

15-06-2019 12:12pm

Boggles wrote: »

When you get a chance could you actually answer my question. Here it is again.

Motor premiums went up 70%, where is the data that says legal fees went up the same amount or similar?

Again no one is suggesting legal fees are not high, but only 5% of cases make it to court, with the vast majority of these not been decided by a judge or being in excess of 100k.

But I did not claim that legal fees are the only driver of increases. It is one of the factors.

If you read the article I quoted from it said "The return to profit in 2017 came after a 70 per cent surge in motor premiums over a three-year period to late 2016. It followed a period during which the industry failed to properly price risks being taken on – and soaring court awards". The surge came up to 2017 and followed a period of underpricing risk. The cost of insurance was too low to cover the awards. We previously had Quinn insurance driving costs down. In the early years of this decade we had RSA driving costs down (in a competitive market). The result ? Its British parent had to pump in the region of €400 million into the Irish arm. If it did not have a British "daddy" behind it would we have been faced with another collapse and a resultant hike in the Insurance Levy as with Setanta and Quinn (and PMPA back in the 80s)?

Back to legal fees. There are the direct costs of legal fees - what is paid out. Then there are the indirect costs, ie, the amount paid out in settlements (and the level of settlements) by insurance companies in order to avoid legal fees. And the level of settlements drives both fraudulent and vexatious claims. They are all interlinked.

Boggles · 15-06-2019 12:32pm

1641 wrote: »

But I did not claim that legal fees are the only driver of increases. It is one of the factors.

You said one of the main drivers. Could you prove please, especially in reference to the last 4-5 years.

1641 wrote: »

Back to legal fees. There are the direct costs of legal fees - what is paid out. Then there are the indirect costs, ie, the amount paid out in settlements (and the level of settlements) by insurance companies in order to avoid legal fees. And the level of settlements drives both fraudulent and vexatious claims. They are all interlinked.

There is a body established to avoid high legal fees, you quoted the figures in your link.

It deals with about 20% of cases, costs at 6% which do not get paid separately.

Seems completely reasonable to be.

The rest of 75% which are dealt with privately do not incur legal expenses or at least do not get paid separately.

So that leaves a very tiny fraction that incur expenses.

I want you to show me how that that tiny fraction is one of the main driver for premiums.

It's a case of simple maths if indeed true (which it isn't).

Show your work?

Nikki Sixx · 15-06-2019 2:38pm

Pity my car insurance was done recently. Premiums due to get much cheaper in the coming months.

Jupiter Mulligan · 15-06-2019 2:39pm

Boggles wrote: »

It really isn't. It's based on data "volunteered" by the industry.

It gives a headline figure of €757 millions losses without breaking down why these loses incur, the link is fire walled so does it mention the billions in profit proceeding those loses?

It blames the loses on not charging appropriately (their fault) and "soaring court awards" - absolutely no evidence of this of course as only 5% of claims get near the courts and the vast majority of these are settled on the steps of the court house.

The actual real reasons they racked up loses was because of bad management, bad investments, soaring broker and management fees and not having adequate liquidity.

Of course you won't get the propaganda wing of the industry to admit this, far easier shout "whiplash", "fraud", etc.

Well said that man! Thank heavens we have a man who is willing to call it like it is! The insurance business is a complete no-brainer and a child of ten could run it successfully!

Any day now we can expect to see Boggler opening an insurance underwriting business in his garden shed to show the big boys how it should be done!

I shall watch the progress of his new company - may I suggest the name "PMPA-2" - with great interest and from a safe distance.

Eggs For Dinner · 15-06-2019 4:04pm

Boggles wrote: »

The rest of 75% which are dealt with privately do not incur legal expenses or at least do not get paid separately.

?

Where are you getting that from? You do realise that the vast majority of claims settled 'privately' by insurers outside of PIAB and the courts incur substantial legal fees paid by the insurers. it is usually the claimants solicitor who rejects the PIAB assessment, knowing that they will get more out of the insurer with the threat of even higher costs of going to court and the lottery in taking a case there. Hence the need to come to a negotiated solution.

When insurers settle a claim 'privately ' you can be damned sure the legal eagles are also collecting a big wedge of cheese in addition to the amount the claimant gets

Boggles · 15-06-2019 5:04pm

Jupiter Mulligan wrote: »

Well said that man! Thank heavens we have a man who is willing to call it like it is! The insurance business is a complete no-brainer and a child of ten could run it successfully!

Any day now we can expect to see Boggler opening an insurance underwriting business in his garden shed to show the big boys how it should be done!

I shall watch the progress of his new company - may I suggest the name "PMPA-2" - with great interest and from a safe distance.

I couldn't fúck it up any worse than they did I suppose.

Eggs For Dinner wrote: »

When insurers settle a claim 'privately ' you can be damned sure the legal eagles are also collecting a big wedge of cheese in addition to the amount the claimant gets

Damn sure, really? And you have some sort of evidence to back up this up?

Or is it the same as yesterday when you claimed the EU had dropped their investigation but it just hadn't been announced yet?

:pac:

fash · 15-06-2019 5:30pm

Boggles wrote: »

I couldn't fúck it up any worse than they did I suppose.

Eggs For Dinner · 15-06-2019 5:49pm

Boggles wrote: »

Damn sure, really? And you have some sort of evidence to back up this up?

:

Yes, I'm a claims handler. Do you think a claimants solicitor works for the fun of it?

Boggles · 15-06-2019 8:20pm

Eggs For Dinner wrote: »

Do you think a claimants solicitor works for the fun of it?

I don't think a clown should work for fun, I fail to see what point you are trying to make.

But again you offer no evidence or data to back up our claims.

In fact the only transparent consistent data that was offered on thread shows

injury case is settled through the Personal Injuries Assessment Board, the delivery costs (legal and other experts) amount to 6pc of the award. The assessment board generally does not pay legal costs.

Legal and experts at 6%. That seems completely fair and reasonable to me.

So the narrative that the greedy lawyers are one of the main reasons premiums are so high doesn't stack up. That said High Court costs for the vast minority that get there are an absolute joke, but that is not exclusive to liability cases.

Also engaging with legal help is not a crime, nor does it mean you are trying to scam the system, the other narrative that insurance companies are the bastion of honesty and would never try low ball a claimant is pretty hilarious.

Eggs For Dinner · 15-06-2019 9:48pm

Your argument is all over the shop. Your example above is the legal costs for a PIAB settled case, which obviously are lower. Even at the stupid levels in the book of quantum, we would all be better off if claims were sorted out here.

The majority are not settled through PIAB, usually at the behest of the claimants solicitor and the insurer picks up both sets of legal costs when settled

Anyway, I'm done here. I'm not a spokesman for insurers. I'm just trying to give an insight in to the real world, away from tilting at windmills

Boggles · 16-06-2019 9:45am

Eggs For Dinner wrote: »

Anyway, I'm done here. I'm not a spokesman for insurers.

Maybe you should be, given the level of spoofing you have indulged in you would be perfect for Insurance Ireland.

defrule · 16-06-2019 10:11am

Just want to clarify the legal requirement thing because it is being viewed as a bad thing.

If you were driving and hit someone and cause very serious damage to their expensive car and they sue you for 30k. If you didn’t have insurance you will likely be broke, you make even need to sell your house to pay up. Insurance protects you from financial ruin.

Now, suppose some young lad hit you and you new BMW is trashed. The lad is uninsured and not a cent to his name. Who’s going to redress you for the damage you suffered? For sure he can’t.

MrFresh · 16-06-2019 10:21am

Wouldn't many of the insurance company have insurance on their major liability portfolios to make sure a large claim doesn't eat into their profits too much?

Nikki Sixx · 16-06-2019 10:39am

It’s all about profit margins. If insurance companies can reduce or almost eliminate claims they can make multiples of the profits they are already making. The savings will never be passed on to policy holders anyway. That is a myth they are selling the general public.

fash · 16-06-2019 11:23am

Nikki Sixx wrote: »

It’s all about profit margins. If insurance companies can reduce or almost eliminate claims they can make multiples of the profits they are already making. The savings will never be passed on to policy holders anyway. That is a myth they are selling the general public.

If the profit levels get juicy enough, someone will come in who wants some. That has happened repeatedly in Ireland (with people setting up companies, driving down prices - but doing so without sufficient profits and subsequently collapsing).

Boggles · 16-06-2019 11:30am

fash wrote: »

If the profit levels get juicy enough, someone will come in who wants some.

And if they are allowed join the cartel that exists.

Darc19 · 16-06-2019 11:38am

Like most "exclusives" in the indo, the headline is overhyped and the real explanation is buried in a few words near the end when the target reader has stopped reading.

As others have said, it's comparing against a very poor year.

What many are missing is that €104m is investment profits, so the real profit is €123m.

Put it in a per policy figure and you get about €40/average policy.

Hardly the extortion that the indo claims.

It's about the same as the estimated cost of fraudulent motor insurance claims cost each policy holder.

Boggles · 16-06-2019 11:59am

Darc19 wrote: »

What many are missing is that €104m is investment profits, so the real profit is €123m.

What do you think financed those investments? Who finances the loses on the investments? There are questions why they should be gambling at all with our premiums at all, but that is a separate conversation.

Also the headline figure is not the real story, the real story is they are back in profit after reporting a quarter of billion in losses for 3 years.

Astonishing really, doesn't quite fit the narrative the poor companies are barely scraping by.

Big profits at 17 insurance companies... Or is there?

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